Employment promotion in Nepal

Women trainees in milk processing
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Employment challenges

 Nepal has a population of 26.5 million which is growing fast, resulting in a young country with 63.7 per cent of the total population below the age of 30.

 The unemployment rate for youth aged 15-29 is 19.2 per cent compared to 2.7 per cent for the whole population. Over 400,000 young people are estimated to enter the labour force every year. These figures indicate the quantitative dimension of the employment challenge in Nepal.


More challenging for Nepal is the quality aspect of employment, which is associated with predominance of employment in the informal segments of the economy where productivity and earnings are low and conditions of work are poor. This, in turn, is manifested in large numbers being underemployed - the so-called working poor. And an important part of the employment challenge is to raise the productivity and earnings of these workers and improve their working conditions.

A large number of labour force, especially the youth have opted overseas migration in search of higher income and dignity at work. Our workers in overseas are least protected and hence not able to get due benefit.  The Constituents fully recognize these challenges and the urgency to address them.  They have prioritised “employment promotion” in all successive DWCPs of Nepal.


ILO Response through DWCP

ILO supported the Ministry of Labour and Employment to develop and adopt a comprehensive national Employment Policy. Plans are underway to provide necessary support in the implementation and monitoring of the Employment Policy. Policy has a focus on informal economy, social protection and youth employment.  ILO is working closely with the Central Bureau of Statistics (CBS) in order to improve employment monitoring and evaluation tools. Indicators have been developed and endorsed by CBS to measure the employment and income in informal economy. ILO and CBS are collaborating for the third labour force survey due in 2016.

To ensure enabling environment for employment promotion ILO’s major technical assistance has been towards labour market reform in the country, which has resulted in a modified labour bill. In order to improve the employment quality in informal economy the new bill proposes that it shall apply to all the workers in formal as well as informal economy.  A development cooperation project is being implemented to strengthen the capacity of constituents and stakeholders for the formalization of informal economy.

The Ministry of Labour and Employment for the first time has taken initiatives to strengthen the public employment services with technical assistance from ILO. This is expected to contribute to increased employability of job seekers in Nepal through informed and labour market responsive decisions.