Unemployment in Nepal

Unemployment refers to the share of the labor force that is without work but available for and seeking employment. Currently, Nepal has a significant adolescent population. This means more people will be entering the labor force each year. ILO estimates over 400,000 young people enter the labor force every year in Nepal. A young country demands ample work opportunities, however lack of desired employment opportunities drive most youths of the country overseas in search of better work experiences and higher income.

In year 2022, the unemployment rate in Nepal was 11.12%. It defined the number of unemployed people as percent of the labor force. The labor force includes the people who are either employed or unemployed, i.e., who don't have a job but are actively looking for one. The labor force does not include children, students, prisoners, retirees and does not have an interest in a job. Currently, the total active workforce in Nepal is around 7 millions and out of it 1.7 million are unemployed. Everyday 2000 youths are going abroad for the jobs. External shocks of permanent labors from bordering India in Nepalese job market are unavoidable factors due to open borders. There are no scientific statistics, but it is estimated that their numbers are close to a million, more than Nepali work in India.

There are limited jobs, 25-30% in the formal sector of government and private institutions in Nepal. A large proportion of work forces are dependent on informal sectors. And every year, over 500,000 young people are entering the labor force.

Jobs are a critical point of the economy. Employment measures the economic health of the economy. GDP could be slower if the unemployment rate is high. It is believed that 4-6% unemployment is natural and more than 6% is supposed to be bad for the economy.

Nepal has been always failed in generating employment to its citizen in minimum level. As result of the declining nature of agriculture and manufacturing sectors are unable to absorb rural unemployed youths, previously which were the highest sources of employment.