Nepal – Jobs Diagnostic

Nepal’s economy is gradually shifting from largely subsistence agriculture to more modern industry and services. Using data from labor force surveys, the 2018 Economic Census and a 2019 survey of SMEs, the report concludes that Nepal’s economy is making great strides towards better work opportunities for its labor force, but not all job-seekers are able to access good-quality jobs…especially women. In the last decade, large numbers of men have entered jobs in construction, manufacturing, commerce and transportation, among others; even though most of these are informal jobs or temporary wage jobs, they are nevertheless more productive and provide improved livelihoods compared to traditional low-productivity farm work. Women, on the other hand, have not transitioned in significant numbers. Nepal’s structural transformation has been slowed by various impediments. Nepal’s dramatic topography makes it hard for many workers to access wage jobs and costly for producers to transport goods and connect to consumers. Gendered social norms limit female labor mobility and work opportunities, and subsistence activities remain prevalent. Most firms are micro-sized and have low productivity. SMEs mainly target small local markets rather than exporting or connecting to global value chains. Workers’ skills are generally low, and employers struggle to recruit higher-level skills needed to increase their product quality, expand operations and create more jobs. The report provides a detailed set of policy recommendations for improving job outcomes through (a) fostering SME productivity and growth; (b) improving the business environment and labor market policies; (c) increasing the individual, family and economy-wide benefits of international migration; and (d) preparing and connecting women and youth to better job options including entrepreneurship.