The Role of Livelihood Diversification and Social Capital in the Movement of Households: A Case Study from Central Nepal

South Asian Journal of Social Sciences and Humanities
Year: 2021 (August), Volume: (2), Issue. (4)
First page: (27) Last page: (50)
Online ISSN: 2582-7065
doi: 10.48165/sajssh.2021.2402

The Role of Livelihood Diversification and Social Capital in the Movement of Households: A Case Study from Central Nepal

Saroj Pokharel1, Dipak Tharu2, and Yagya Murti Pandey3

1Master of Philosophy in Anthropology, Tribhuvan University, Kirtipur, Kathmandu, Nepal
2Lecturer in English Literature/Anthropology, New Millennium College, Kathmandu, Nepal
3Master of Arts in Sociology, Tribhuvan University, Kirtipur, Kathmandu, Nepal

Corresponding Author: Saroj Pokharel, Email:

Online Published:
8th Aug 2021

19th May 2021

14th July 2021

How to cite the Article

Pokharel, S., Tharu, D., & Pandey, Y. M. (2021). The Role of Livelihood Diversification and Social Capital in the Movement of Households: A Case Study from Central Nepal. South Asian Journal of Social Sciences and Humanities, 2(4), 27–50. Cite
Pokharel, Saroj, et al. “The Role of Livelihood Diversification and Social Capital in the Movement of Households: A Case Study from Central Nepal.” South Asian Journal of Social Sciences and Humanities, vol. 2, no. 4, 2021, pp. 27–50, Cite
Pokharel S, Tharu D, Pandey YM. The Role of Livelihood Diversification and Social Capital in the Movement of Households: A Case Study from Central Nepal. SAJSSH. 2021;2(4):27‑50. DOI: 10.48165/sajssh.2021.2402 Cite
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The study aims to investigate the role of livelihood diversification and social capital for the households’ movement, and also to explore the identity and bond of social capital and livelihood diversification to achieve an improved lifestyle. Human relations significantly create a network society, impalpable resource of community, shared values and trust which we draw upon in our daily lives. Livelihood diversification is a community-practised strategy for managing economic and income diversity in poverty reduction. It has highly emphasized income and well-being to diversify livelihood. It also turns the likely norms and networks with the households from exploiting new economic opportunities even in the future. This study responds to why people are migrating from the surrounding and the long distance of Kathmandu, and largely dependent on direct cash incomes from informal activities. It used qualitative approaches such as ethnography, case studies, participant observation, etc. to study the relationship between households and social capital level and livelihood diversification. Hence, the effects of social capital and livelihood diversification were found protecting households’ income. The major findings also show the social supportive network index which has significant effects on the households’ ability to learn a new livelihood. Income generations similarly affect the household capacity to secure a home and the socio-economic condition of households. This study can be advantageous for making both local and urban policy to diversify household livelihoods and social capital as well as applicable for new researchers in social sciences. Most importantly, it helps readers perceive new ways of promoting livelihood diversification and social capital and as a whole social advancement in Central Nepal.


Income Diverse, Livelihood Diversification, Migration, Social Network, Social Capital.


In general, social capital is a network based on shared norms, values, and trust, which is merely bringing to the analysis of relationship and behaviour. Surely, if the concept does add anything new in analytical terms, it lies in its focused-on network and relationship as a resource. This is how social capital has been conceived by Bourdieu, whose writing on social capital was as part of social order (Field, 2008). It is perceived as necessary to reintroduce various shapes of social capital to count make-up (Hauser et al., 2007), and the social world (Bourdieu, 1986) practices this approach in one direction, that social capital is viewed as a capital utilized by the world-class groups. Those who had limited financial capital and/or cultural capital, for instance, the French nobility in their Jockeying for the position (Field, 2008). Social capital is also defined as an aggregate of the actual or potential resources that is preferred to the charge of a persistent network of the institutionalized relationship of mutual amity and identification (Bourdieu, 1986). It was the first systematic definition, on which the instrumental concept of social capital is presented; individuals sociability creates to gain resource which is possible through solidarity (Cohen & Fields, 1999). But this is also probably expecting too much of a concept that has not entirely shed the status of a metaphor.

Bourdieu (1986) impracticably argued that the understanding of the social world without approving of the capital’s role in all forms and partially in the one form recognized by economic theory (Bourdieu, 1986). Social capital, according to Coleman (1988), American Sociologist, is regarded as a useful resource available to an actor through his or her social relationship. It comprises a variety of entities that, Coleman surmised, all consist of some aspects of social structures, and they facilitate certain action of actors whether persons or corporate actors within the structure (Field, 2008). He was on the line of individual and small scale as a unit of analysis like Bourdieu, but in the waning years of his life, he moved towards disintegration (Portes, 1998). This version indeed has been of virtually any concept in social science, including human capital, power, class, and gender. This issue is not whether a concept can be applied loosely, but whether it leads to new insights when applied finely in drawing our attention to how networks and shared values function as a resource for people and organizations (Portes, 1998).

In early writings, Coleman (1988) emphasized the contribution of social capital to create human capital children’s education in particular. Putnam (2001) became famous for relating social capital to the quality of democratic government of Italian regions. Later, he presented its relationship to contribute to the education, health, minimizing violent crimes and economic equity of American society. Since the early 1990s the social capital science literature about social capital increased dramatically relating different variables (Field, 2008), its relationship with livelihood diversification is still sparse (Nguyen Van Kien, 2011). Most social capitals reflect positive implication of social capital in livelihood diversification (Watete & Mueithi, 2016), but some of them (Nguyen Van Kiem, 2011) doubted. There is not enough scientific research on livelihood diversification in Kathmandu. Some early researches focused merely on the impact and making livelihood diversification response activities, our income diversity, different castes, ethnic groups in the modern age situation and many others but not on diversification. Lumanti (2005) concludes that the assets of the urban economy are the urban poor, who are mostly involved in the informal sector of an urban economy. They have diversified an unstructured source of the economy due to their irregular and seasonality of employment/work. They earn cash from the common areas of interest such as wage/labour, small cell business including vending & private and professional service. Likewise, the quantity of households’ income largely rests on ethnic background, working hours, nature and seasonality of works. In addition to other, there has a serious implication of education and working hour on household revenue (Ahmed et al., 2021).

This study aims to describe the available social capital and its relationship with livelihood diversification and social capital, which are not easy. It primarily investigates the roles of social capital in livelihood diversification. It also strives for the exploration of social identity and/or bond along with social capital and livelihood diversification. 


Since the research on livelihood diversification is not sufficient in Nepal, social capital is studied by a very limited number of Nepalese social scientists who study Nepalese society. Gautam is one of those limited scholars who studied about livelihood diversification of Humla Nepal, but his small and rural village investigation on livelihood diversification. Gautam & Andersen (2016) also talk about rural livelihood diversification. Some Nepalese scholars, for xample (Lumanti, 2005) are smart who studied the operation of livelihood diversification in Kathmandu. The limitation of this limited research is that they do not succeed to capture the current social capital of Nepalese society and its role in livelihood diversification.

Livelihood Diversification

There are different concepts in defining the term livelihood diversification based on time and space. Rural livelihood diversification is defined as the process by which households construct a diverse portfolio of activities and social support capabilities for survival and to improve their living standard (Ellis, 1998). The cause of the adoption by rural families of diversified income portfolios are better understood than the policy implications (Murfot, 2013). Considerations of risk spreading consumptions, smoothing credit market failures and coping with shocks can contribute to the adoption and adaptation over time of diverse rural livelihood (Ellis, 1999).

The concept of Livelihood tries to carry the non-economic attributes of survival not just the economic ones and it, thus, contains interposed social relations and institutions which facilitate people access to different assets and income system (Berry, 1989). For instance, families make of extended kinship networks and social capital to secure income components that originate from different activities in a different location (Berry, 1998). Similarly, individuals and households pursue diversifications as a livelihood strategy after being divided into two overarching considerations, which are necessary or choice, and is sometimes posed as being a contrast between survival and choice (Pramanik, 2019). It may also lead to household adopting a more vulnerable livelihood system than they possessed previously (Sun, et al. 2019; Davies, 1996).

The household economic model also predicts diversification as a function of on-farm returns to labour time compared to off-farm returns earning opportune (Gautam & Andersen, 2016). The fundamental motives for livelihood diversifications concerning income streams are replaced by probabilities of occurrence the social unit diversifies its portfolio of activities to anticipate and to ameliorate the threat to its welfare of failure in individual activities (Ellis, 2000). Likewise, several kinds of literature were reviewed on livelihood diversifications and were concluded that those early definitions were emphasized diversification in a predictable sequential manner and expected by sustainable for then livelihood diversification (Ellis, 2000; Bryceson, 1996). They also emphasized the elements of rural livelihood diversifications in developing countries and defined it as the rural households which took a larger number of views of livelihood security than mainly taking advantage of currently available income-earning opportunities. Future livelihood prospects are described here as the household asset strategy (Peng, W., et al. (2017). The livelihood approached to rural poverty reduction tends to identify five main asset categories that jointly determine the asset status and livelihood robustness of household survivable strategies (Deng, W, et al., 2017). These categories are natural capital (land, water, trees), physical capital (irrigation, canals, implement, roods), human capital (education, skills, health), financial capital or its substitutes (cash saving, jewellery, goats and cattle) and social capital (network associations).

Why Does Livelihood Diversification Mainly Function?

Based on the literature, it can be concluded that livelihood diversification in today’s social science is not only a diverse or diversification process assumed by structural-functional theories. Anthony Giddens’ structuration theory confirms that social structure is the product of practice with his duality of structure and agency to improve future livelihood prospects. It has been considerable attention to personalized networks setting up a complex but informal system of rights and obligations designed to improve future livelihood security (Berry, 1989; Ellies, 2000). This is also a form of social capital (Putnam, 1993) and is regarded by households as an asset requiring investment with a view to securing potential future returns.

For the pursuit of diversification in the direction of its implication for poverty (Ellis, 1998), first, the very poor having a diverse alternative for income generation can distinguish between nominally viable livelihood and destination. Second, the role of diversification in limiting the property intensity at the lower end of the income allocation means not having a balancing result on the rural income. In general, rich people have access to a more willingly diversified labour market than poor rural families, and a positive correlation between total income and non-farm income share is thus found (Ellis, 1998).

Livelihood diversification is taken as the method of increasingly establishing the diverse livelihood activities of households and an asset to survive or improve standards (Ellis, 2000:15). It refers to livelihood diversification which is the formation of a livelihood portfolio containing on-farm and non-farm income. It is less dependent on non-farming income than farming income if adverse natural events disrupt the income streams of households. 

In terms of livelihood diversification, Ellis (2000:11) regards income sources as “farm incomes as income generated from own account farming whether on owner-occupied land or land accessed cash of share tenancy off income as wage or exchange labour on [the land of] other farmers and non-farm as non-agricultural income source such as remittances”. A variety of livelihood activities gives vital assets for safeguarding the outcomes of severe hazards. The greater diversity of incomes is everyday life’s income diversifications of households, which is not compulsory that exogenic tendencies and shocks still do not play an important role in attributing rural people towards the diversified livelihood strategy. 

Even, diversification choices are deeply rooted in the microeconomic logic of farming household. Different elements should be considered in this connection, for instance, saving land, education and/or access to market or employment opportunities, access to common property, natural resource and other public goods. New tiring ways to sustain the existing income portfolio are also the farms of adaptation (Darnhofer, et al., 2010). It is thus another vital part of the livelihood diversification choice, which predicts that at any given point in time, a rural household will pick the most profitable opportunity for ensuring maintenance of its consumption level. This formulation can be elaborated in different ways focusing on different criteria such as farm vs. non-farm, on-farm vs. off-farm, local activities vs migratory, self-employment vs wage labour (Ellis, 2000; Barrett, 2001). All this classification is useful for making sense of the nature of the choice entailed by the rural livelihood diversification process (Ellis, 2000).

Conversely, Escobal (2001) shows that the farmers, in a variety of regional and local settings, are capable of combing conventional farming activities with innovative rural enterprises and enjoy higher income and safer livelihood than farmers devising their income from conventional farming alone for a combination of conventional farming and wage labour, and then supportive structures and processes including development services create transport and communication infrastructure. Livelihood encompasses both incomes: cash and social institutions (Ellis, 1998). Gender relation and property right require a living standard, and social and kinship network is significant to facilitate portfolios (Berry, 1989). 

Social Capital

Social capital, a simple concept has swiftly developed into a pretty more complex account of human relationship and value. It possibly will integrate with other forms of capital to generate and replicate inequality for people (Bourdieu, 1996). The production and reproduction of capital explained inequality s/he had initially espoused the concept of cultural capital to clarify the unequal academic achievement of children from different social classes and groups within the society. In search of conflicting cultures, and investments policies within the family, some social groups could be ensured of their children’s optimized yield from education (Bourdieu, 1996), but different social capital had been a valuable resource offered to an actor. The actor thought his/her social relationship, and some aspects of social structure facilitated certain action of actor where persons or corporate actors were within the structure (Colenam, 1988). The social capital helps understand the problems of collective action like human and physical capital which are normally private goods whose ownership and returns reside with an individual’s social capital quintessentially as a public good that is created by and may benefit not just those whose efforts are required to realize it but all who are part of the structure (Colenam, 1988). It, therefore, demands cooperation between an individual who is nevertheless pursuing their self-interests.

Social capital here refers to features of social organization such as trust norms and network that can improve the efficiency of society by facilitating coordinated action (Putnam, 1993). The term itself is defined as referring to connections among individuals-social network and the norms of reciprocity and trustworthiness that arise from them (Putnam, 2000) on the three types of authors’ concept but the study of trust, norms and network will be highly focused (Putnam, 2001).

The human capital tradition of thinking about the economics of education and the metaphor similarly points to the idea of investment accumulation and exploitation that have been seized upon in such areas as global development and anti-poverty strategies or the study of business innovation and technological change. The features of social capital origination are believed that social capital is a good thing and its collapse is a bad thing (Putnam, 1993). It is also argued that the central ideas of social capital which are both network and associated norms of reciprocity have value (Putnam, 2001). It may be formal and informal and its network may be densely interrelated, and somehow invisible. Putnam shows a strong correlation between social capital and different social variables like education performance, health child welfare minimizing violent crimes and civil economy equity in the US states. He also introduces two basic forms of social capital network and trust among homogenous people as bonding (exclusive) social capital and among heterogeneous people. The bonding (inclusive) between social capitals (Field, 2008) had contrasted and synthesized the ideas of these three founders of social capital theories. 

Meticulously, social capital is not capital in an economic sense and although all Putnamian definitions imply different perceptions of social capital rather than in existing sociological definition (Bjørnskov & Sønderskov, 2012). It is a production factor that rests on social relation. Putnam’s definition of social capital easily meets this criterion; however, this comes at a great cost. It is a set of resources found in family relations and community-based organisations, that are valuable for the cognitive or social development of young children/ people. Thus, the norms of reciprocity foster social trust and altruistic action with attendant economy or particular outcomes based on which the collective action and particularly the network are focused for facilitating the norms.      


The present study used qualitative approaches to analyse social capital and its role in the livelihoods of Kathmandu residents. It was conducted over one year from March 2018 to February 2019 in Kathmandu to investigate how the migrants’ social capital was at present and what roles it was playing on their livelihoods. It also aimed to explore the livelihoods diversification of the migrants throughout their temporary stay in Kathmandu. 

In this study, various qualitative tools and techniques, for example, in-depth interview, participant observation and focus group discussion (FGD) were used to gather data and information to fulfil the proposed objectives. It primarily employed case studies of six migrants who had come to Kathmandu from different districts of Nepal. Each of the migrants was from different ethnic groups and cultural background. Concerning a case study, Yin (2003) regards it as a manner by which the researchers can answer questions arising from events that happen to a specific person or group of people at a specific point in time (Terrell, 2016). In some ways, it will answer the research questions related to households in the Kathmandu district with multiple income sources as a unit of analysis. Consistent with the notions of various researchers, each participant responded differently but their senses were ultimately the same to each other. Case studies helped the researcher deeply understand the daily social behaviours which diversified the migrants’ livelihoods. 

Similarly, the researcher used the in-depth study of people’s practices, experiences and feelings which were appropriate tools for data collection for measuring social capital and livelihood diversification such as group and network, trust and solidarity, collective action and cooperation, information and communication and other indicators. It also helped the researcher to examine how social capital determined migrants’ livelihoods. In terms of social capital, Watete and Mueithi (2016), Putnam (1995, 2000, 2001) and Vain Kin (2011) were taken as a prior reference to identify and examine the variables. All participants emphasized the diversification of livelihoods and the promotion of social capital for social bonding. Even if they belonged to different cultural backgrounds, they never refuted to support for others to run local markets, shops, or businesses. Also, social networks facilitated the migrants to find priorities and opportunities, and also to establish positions on issues and approaches, and plan strategies for intervention.

Focus group discussions (FGDs) was necessarily used to discuss different five groups of men, women, wage labourers, who were living in diverse ethnic societies in Kathmandu. In each group, participants were asked where they came from and why they migrated to Kathmandu. And also, what were their main income sources and where else were they engaged for income generations? The majority of participants concluded; 

We are running shop, business, entrepreneurship to earn our livings. We are also engaged in private jobs for extra incomes. Conversely, the social network has supported us to generate our incomes and has diversified our livelihoods.

After receiving responses from participants, it was obvious that migrants chose Kathmandu to seek an opportunity and prosperous life. Also, they believed that their life could be secure if they migrated to Kathmandu. In the respective societies, the social network is still playing a significant role to diversify the migrants’ livelihoods. 

The applied research approaches draw upon the crucial role of social capital in the diversification of livelihoods. Also, social networks are supporting households to maintain a strong social bond between the people who originally come from different cultural backgrounds.


Social Capital on Livelihood Diversification

The livelihood diversification process is returning to the normal stage from the previous condition of our livelihood and household condition. The main concern is that what the community mainly on livelihood diversification is and how they manage the crisis on the livelihood and how they diversify are income-sources of the households. It describes the support of social capital on the livelihood diversification process on different process. It also discusses the problem of the diversification process in Kathmandu. Comparatively, the city stage of the livelihood diversification process during this research had a better status of social capital. Scholars divided into two diverse households such as whom our life is uncomfortable to feel insecure, to make a powerful life.  

The immediate uncomfortable situation, traditional and modern phase and permanent diversification phase argue bonding social capital in the initial phase of livelihood diversification and linking social capital in the later phase was important and bridging social capital were not presented.

Risk Period of Life and Bonding Social Capital

When risk management further happened, people gathered or contacted their close family members, relatives and neighbours, relational networks members. All of the respondents were in an at-risk period of life, their household was poor and unemployed, so they lived in a more vulnerable group than felt in a various normal income-source moment of their life. The main thing is how to diversify our income and livelihood of all people. Another main problem is that how to raise the living standard and income source. The situation of the family is difficult to run everyday life in such a situation that the important role of collaborator to share helps with support by a close friend, neighbour, mutual organization membership. The families with parent member are located in Kathmandu from Kapilvastu. Tulsi aged 45 years who was to get a spice machine during life experience with the risk said;

I was born in Kapilvastu and was a member of the Aadarsha Yuba club while living there. I was operating the spices machine. At the same time, the Maoists led people’s war and badly destroyed several businesses like mine. Also, I got frustrated and my family began to face a difficult situation. Consequently, my parent left that place and moved to Kathmandu. When they came to Kathmandu, only 14 thousand rupees took a bicycle with only two sets of clothes. Sometimes, sat with my friend, and then the friend did what he did to work on the bicycle and sell stuff. I did the same thing which took about 6 months for such work. And then, I tried to raise a spicy machine and a small grocery store which is known as Gaire Kirana Pasal. The following friends helped me to keep that shop: Suresh 20 thousand, Raju Thapa, store drawer, Bhandari machine riding spicy. Rabindra sookesh counter, so my shop was established with the help of friends. From this shop, I have also managed to add children’s education and some land. In the present situation, my family income source is very good. Here’s the grain of the village and are two shops. I have a son’s job and invest in one Hydropower Company. There is my family income source in different five places (Field notes, November 2018).

Tulsi’s narration and other respondents made a clear point that in one of the risk periods of life, people remembered and exchanged support within bonding social capital i.e., family and close friend and kin relation. He is a family parent, who holds family responsibility to earn money for providing education, and then arranging gass (food), bass (shelter) and kapas (clothes). He is going to drive a spicy machine by cycling every day and experiencing business. In his family, 3 children (1 son and two daughters) were doing a job and his wife is housekeeping who runs a shop. Similarly, the daughters also help in making food, washing clothes at home. Tulsi is bonding social capital and human capital who had two social organizations and help as our relatives to people coming from the village. I come to help someone who looks for a shop in a risk period. Santosh aged 32 who is unable to generate income, does not know anything about the market. He said; I was born in a rural area of west Nepal. I have done +2 level. Due to financial problem, I was not able to continue my higher studies. When I went to Kathmandu, I met one of my village uncles who was a police officer. He helped me find work at a hotel. I worked in that place for two years. I met one of my village brothers who worked as a marketing officer at the Kantipur biscuit company. He helped me work together at that company. After a few years, I invested to run a wholesale shop and now I have two cars for marketing. This shop is worth fifty thousand If we see the income of our family. I have also engaged in farming in the village. There’s a shop and marketing van and brother is also running his shop (Field notes, July 2018).

In Kathmandu, migrant people who are immediate for livelihood diversification get a job and join other business. The maximization of return per unit of labour is an important element in livelihood diversification choice (Ellis, 2000). Here, seasonality may also lead to a cyclical shift in time allocation from on-farm to off-farm sources of another or capital market. The strong ties as bonding social capital were available and used to evacuate a risk period of life. Thus, in the immediate risk period of life, bonding two types of social capitals (Watete and Mueithi, 2016): trust and network within their relatives is making relation, kinship, friend and social norms like co-operative management use by risk period of life. Bridging social capital (ties among different demographic characteristics) and likening social capital (ties among network relation and formal organization and friendship by working period) were rarely amiable.

Insecure Life with Transformation

This research considers the risk which is the root cause for diversifying livelihood, when outcomes vis-à-vis income streams are substituted by the prospects of occurrence, the social unit varies its portfolio of activities to foresee and to ameliorate the threat to its welfare at the individual activities. An example is Diwakar aged 34 from Kathmandu said;

I was born in one of the rural hill areas. My childhood desire was in tune with the song and I was fond of a singing song in schooling time. There were also various awards such as pen, copy within use. My study was supported by household’s expenses. At that time, I was in S.L.C. and the national secondary union (Rastya dohori organization) conducted a program in our village. In that program, I got a chance to sing a song and the artists liked me listening to that song. Immediately, I was made a member of that organization. After that, I was contacted by an artist. When I came to Kathmandu, I was asked to work with him in dohori sajh (evening night show). In that place, I learnt to sing a lot of songs and also released a Teej song. While living in that place, my work was not only to sing songs but also to learn cooking. Due to cooking, I had already presented at a hotel where singing was a recent income source of our household and my brother went abroad. As a result, there are livelihood was diversified (Field Notes, 2019).

Participants generally possess a lower household income source and lower educational level. They are more likely to have few relational accesses. Connection and network are also diverse on the livelihood. Household income sources are more likely to have a larger supportive network in coming various households that the members transfer agriculture to non-agricultural occupation. The measure of livelihood diversification is an intricate process. Social vulnerability indices are built with more efforts to perceive whether or not different social groups or communities are susceptible to the transformational process. The research field positively stresses but also addresses the innovative aspect of diversification to learn and transform that the capacity of resource users to respond positively to change is associated with the level of happiness. The respondents were expected a level of well-being about their attitudes to contriving policy change from the traditional situation. When measuring the stress-coping capacity of an individual from the household, the scales include the various items of work service as rural households in Nepal have experienced the impact of their livelihood for the last period. If the households have a high level of good fortune, they are likely to have a high-income source which reflects the expected well-being of rural household in the income source. They were settled with a qualitative series of securing household food and income as well as interest in a new learning way of adopting education. And other skills were mostly seen as the greatest vibrant indices of diversification with nutrition food, skill, education, and also diversified income sources. The most diversification of a family is to learn a new way of livelihoods in Kathmandu, and the process of our diversified income sources is important for education and sanitation. Maya aged 30 was a female migrant who worked in a school in Kathmandu. She shared;

I am a housewife but I have not been working only at home. My husband works in a marketing company and I have also taught my children in school. I am going to teach at this school because my children are studying there and I can care for them. The principal of that school was our villager. My earning is now expenses for house regulation and my husband’s income is like a save that has been used to buy some land and cultivate. According to the advice of many friends, it said that the importance of education and health is a must for our livings. Therefore, I have been giving high priority to health and education (Field notes, August 2018).

Generally, our income source is diversified by the focus on education and health with a positive role of individuals. Household knowledge is known to power, and social capital theorists also emphasize the role of information channels and network structure. Importance of individuals action (Coleman 1988) is the case of Kathmandu city that the flow of positive network structure and information ties made move on from one place to another because of livelihood diversification. Some households are hard up to diversify their activities. Quality education is only one thing to support the family for diversifying income sources. 

Livelihood Diversification in Kathmandu

In the early last period, people highly migrated from the surrounding district to Kathmandu city. Those migrants were nearer to local families in Kathmandu. Livelihood diversifies, so the migrants can get such opportunity and job, and learn skilful works mostly depending on direct cash income from the informal activities. Casual wage labour, education activities, petty trade, private and professional services are common livelihood diversification (Dahal, 2011).

During this fieldwork, one more household included rebuilding a completed list was of Ramesh, a key informant for this study. Why did his income diversify on the household but not all households advance diversity yet? His family was economically strong and embedded in social network, kin relation, friendship to the diverted house in Kathmandu. He added:

I am a cooperative man so, it’s fun to tell me about what people are doing in this market and how their earnings are. About 12 hundred people were businessmen in my co-operative organization within the surrounding (Gonggabu) area as a small businessman and big businessman in my contact. I am very aware of their businesses. People who have a small business have also managed to save themselves by using their standard of life. People doing business are outside Kathmandu. Many people are also having business here; farming is also available in villages to help their children get much help from the business. If there is any such thing and some people have the business that very good to invest when small businesses have made a lot of progress. The earning has invested children in such a good way to teach good education and skill-based doctor, nurse,engineer in their people. Many people have taken advantage and it has a diverse income source (Field notes, September 2018).

The other five respondents from Kathmandu are migrants from another district. They are also making our family member skilful and income generation oriented. As Ramesh said, Maya and her family are planning for a son, but are facing problems at the time. Another respondent Ramu aged 38, stated that different income source was of our family. That is to say, his wife was a teacher working at the boarding school and his brother, a car driver and another brother has gone abroad. Likewise, his parents were engaged in farming at home. All respondents were making their household income source as diverse as all households happened in the joint family. In the Gonggabu community, there was a Bank Manager named Baburam aged 33. He was diversifying the income source of his family. He accentuated; 

Four brothers in my house are engaged in different occupations and I’m a younger brother. The first brother is a lawyer; the second brother is a government official at the Education Department of Government Nepal; the third brother is a Maths teacher who teaches at the tuition centre and school. Also, my father is a lawyer who is working in a village. Similarly, my household income sources are of five types and it is a joint family. However, we are happily living together with much care and love (Field notes, December 2018).

For Baburam, the foundation’s support is diversifying our livelihood though the family has also diverse occupations. Income generation activities are available in Kathmandu and principally prevail unequal and reliant on a different time, gender, age, and educational background. Seeking work or service, skilful actions and petty trade bring the maximum earnings and livelihood diversification as well. The standard of family income sources with an association between the social capital is also found. For instance, family income sources determined the formation of family, working hours, working nature and modality with a social network. Education and working hour have significantly affected household incomes. Likewise, we can not neglect the poor as they are the assets of the urban economy and laborious and good enough for the network building. Nevertheless, they are made highly vulnerable by the destitute policy and aptitude in the milieu of urbanisation. They are mostly neglected in the mainstream of the development making process and characterized as unlawful and unauthorized settlers. They are the marginal community members, who move to the city for living in squatter settlements on the city outskirts.

Permanent Livelihood Diversification and Social Capital

Households in Kathmandu take a bit longer-term view of livelihood security than merely gripping gains of presently existing income-earning opportunities. Hence, an important extra motive for diversification with life security or regular purchase is investing for the growth of income-generating skills in future that mutually fix the asset status and livelihood (Ellis, 2008). They are also supported by human capital (education, skills, health) and social capital. Network, associations, where most households have been making our livelihood diverse in Kathmandu. Shailesh aged 48 was a chairman of a community police service organization (CPSO). He noted:

In my family, there are one son and two daughters. I have been living in Kathmandu for many years actually for my children’s education and their future. When I came to Kathmandu, I did not get too much money. Initially, I was a partner (friend) in a month when I came to Kathmandu. I worked for a business. Similarly, I started to run a hotel. The money earned from there was already invested in children’s education. As per rules and regulations, the hotel was chaired by the chairman of the association and community. But now I am the only chairman of the community police service organization (CPSO). My son is in America and my daughter in Australia. And my youngest daughter is a staff nurse. To send my children abroad, some friends of the organization helped someone with information to order cash for me. Now, cash has been refunded to everyone and today everybody has been reimbursed. Children are now making good earning and savings. even in my hotel, I’ve been using a tab that will be saved therefrom (Field notes, January 2019).

Shailesh’s family was able to succeed in livelihood diversification. It is then an income source diverse for his family. Other assets in future livelihood prospect have been their society observed for personalized networks, inventing complex, but the informal system of rights and obligations formulated to enhance future livelihood security (Berry 1989, 1993). Being a form of social capital, the household takes it as an asset essentializing investment with an opinion to securing potential future returns.

Community organizations in Gonggabu play a crucial role in social development, collective action and many other programs. For invited security and sanitation of the community, the road was an example of collective action to support consciousness of household such as organization working field Gonggabu for this research focused on community. Therefore, collective actions and organized movement support household members. Wage/labour and small-scale business are the common areas of interest for earning cash. Most youths are attached either to private and professional and self-service achievement. Different European countries are found important with income generation activities by age, ethnic background and educational standard. Likewise, the amount of family income mostly relies on ethnic background and organizational relation with a network, working hours, nature and seasonality of work. Education and working hour significantly affect household income. There was also a social capital supportive network to manifest a positive relationship when the income area diversifies the household.

Network Migration and Livelihood

The relationships between migration and network have been debated for decades shifting from the livelihood diversification in Kathmandu, Nepal. The migrants mostly from outside Kathmandu have been well-recognized in this study. First, migration from the central hill and mountain region involves more than migration from other parts of Nepal. Second, migration from eastern Terai, and third eastern hill and mountain people are one to one network; we are more supported by migration than people. The condition of our life is better, as well as a different income source makes on the family. Also, livelihood diversification and different people from saving and credit groups provide access to a network supporting. Saving and credit group/cooperatives locally established are well-developed from legal status and livelihood diversification with several members of the household.

The importance of the network to migration and the term chain of migration, for instance, has long been used as an income source. The tendency of new migration to rural places where they have friend or kin provides a source to facilitate adjustment and also possibly help compensate for the lack of other resources such as cash or qualification. This has been repeatedly demonstrated both from studies of Kathmandu communities and supplier communities. Strong evidence is available for the role of the network of relationship connections in the chain of migration. The average income of the urban area in Kathmandu people of the household (Dahal, 2011). For Nepal, overseas services appear to an important source of household income, however, the average households are involved in extraneous opportunists. It also rests on socio-economic networking and individual disposition to diversify income such as different income sources with family income. In various cases, skilful activities bring comparatively higher returns than others. In such cases, income generations from various sources and/or sectors have better improved petty business, and on the other hand, contractual works are mere major sources of family income.

The Kathmandu residents can easily approach diversified income-generating activities through various employment and market opportunities rather than other cities or town, but strong social capital is required. Our income source is diverse, and social capital arises from a good relationship with other people in a formal or informal network. And, it is also the potential or actual amount of resource a person can generate through these social relations.


The major findings principally reflected on the risk period of life bonding social capital. For example, family, friend, kinship and neighbours, were important collaborators and source, knowledge share for the emotional and other support of the diversification on the family income and insecure life that are transformations and also the important role of the network many organizations participate members. This network supports the livelihood diversification and socioeconomic condition of household and organizations maintain a positive relationship when a family income, education, health are better supportive network indexes. In the rehabilitation time, there was migrants’ presence of all kind of social capital bonding, bridging and linking, but one kind of organizational networks and kinships is friend network. Migrants support the income source of people that benefitted Kathmandu lives and income source diverse on the case of risk period of households we support the diverse in Kathmandu. There was a different social capital aspect that community organizations, norms of reciprocity as cash-based help and knowledge of business with the betterment of Gonggabu, Kathmandu are facilitating for livelihood Diversification. 

This research is close to their conclusion because the condition of livelihood diversification bonding social capitals, especially household, neighbour, friend and kinship and other networks were most valuable to share or support by invest of cash and knowledge share, fear and problems. In this stage, the main supporting things were emotional not any materials of cash, all of them were on the same status. There was an income diverse situation having made collective supports and individual’s supports. In this immediate stage of any running of livelihood goods and cash linking, types of social capital were sparsely present. Its reason may be that bridging ties between a rural and traditional society generally have a weakness (Fukuyama 2001; Ellis, 2000). The presences of bridging social capital for all phases are not clear link types of social capital, especially formatting social organization was important for livelihood diversification. Unfortunately, this valuable linking of social capital is one kind of social formation in an organization with earnest support agencies during the immediate problem of livelihood running. These conditions of diverse household are tended to overcome by social capital such as lending money from organizational relation and relatives for financial support, knowledge sharing, searching for job and business. Such work is enough evidence to argue that social capital matters of livelihood diversification. In many types of research on social capital and livelihood diversification (e.g., Watete and Mueithi, 2016), there were attention consequences of social capital to which this paper raised. Even though more experience on external source is an example in this research but my research has conducted. 

There are various factors directly and indirectly. The support by household income source diversifies, but the role of social capital should not underestimate. The dynamic of social capital which affects livelihood diversification and other aspects of society should be at the attention of future research. Social capital began as a comparatively simple concept and it has evolved rapidly into a rather more complex account of people’s relationship and their value. The debate over social capital has started to lay bare, some of how social ties can be activated to produce particular types of benefits on livelihood diversification (Nordbø, 2013). The most important aspect of this objection concerns the extent to which the concept refers to activities, relationship and values that are liked to one another whether in our intimate relationship in our network of friendship and acquaintance, or our connection at work. If this creates difficulties, they are probably not those normally meant by people who lament the decline of the community as well as social capital. There was a different form of social capital in traditional Nepalese culture. The structural changes in Nepal influence the democratic and development plan policy and programs of the state after the 1950s, which are promoting them. They are also made of livelihood diversification that uttered the civil society and social capital. The livelihood diversification program was also a change in the modern era. The bonding types of social capital are becoming sparse, at the same time access to bridging and linking social capital are increasing (Swart, 2017). This consequence by the migration, globalization and modernized development on which Fukuyama (2001) were optimistic about breaking traditional un-democratic limited ties to establish new ties. As the national and global bridging ties increasing, the presence of the state increases. But the loss of traditional demographic institutions and norms of reciprocity also are wreaking and disappearing which is making blank space for civil society in the rural area. 


This study was conducted in Central Nepal, Kathmandu to especially focus on the role of livelihood diversification and social capital of migrants, indigenous groups from different cultural backgrounds. Similarly, it concerns the populations of migrants living in Kathmandu for various purposes. Significantly, it covers one year from March 2018 to February 2019 as the research duration (time) for this study. During this period, social capital, social bonding, social networks and relations of the migrants in Kathmandu were observed to diversify their livelihoods.  


This study assumes that social capitals were important for immediate support but cash, life, knowledge and social capital with a livelihood diversification in Kathmandu Nepal. Based on a qualitative case study, it reveals the status of social capital and how it is changing in Kathmandu. It further examines more variables affecting social capital in the city of Nepal. It suggests the need for income source in our daily life to facilitate the social capital for creating an effective livelihood diversification. Social capital includes societal means and resources which are tangible and intangible aspects for running their livelihood. Similarly, social capital in which social practices, norms, values and assumptions are for daily livelihood and fulfilment of their own needs. The capital has been creating its structure in systems, provisions and procedures are to get tied for the mobility of lives. Various sorts of social capital were barter system, common ownership with labour, cultural offerings for needy people, exchange of physical labour and so on. For this, people living in any place would move for different kinds of social accounts like job opportunities, a traditional mode of production or modern modes of production, co-operation and co-production. Likewise, communal modality, socialist model, democratic individual priority toward capital oriented were highly concerned in those days and are concerned in today’s society. In the regard of social capital, a thorough study of historical, sociological, anthropological studies and modern ways for capital related to human resource, natural means and source, cultural heritage with valuable knowledge and practices, economical scopes with the innovative mode of production, technological development, advancement of education and research are keys of social capital.


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