Kathmandu, September 13 : Nepal’s economy created nearly four million jobs over the past decade, and average job quality increased significantly, according to the World Bank’s recent Nepal Jobs Diagnostic report.
The report, however, said, “The continued job creation, especially of wage jobs, is needed to absorb underutilized workers into better-quality, stable, and well-paid jobs. “The economic disruption caused by the COVID-19 pandemic– while not addressed in this report –highlights the importance of increasing stable and secure employment in the post-pandemic recovery period.”
Evidence from a combination of data sources – national labor force surveys from 1998, 2008 and 2018, the 2018 Economic Census, and a 2019 survey of 900 SMEs across 6 districts – points to a number of constraints to achieving better labor market outcomes in Nepal. One key impediment is Nepal’s dramatic topography, which makes access to wage jobs and to product markets costly, the WB points out.
Most jobs are informal and concentrate in relatively low productivity sectors,while most firms are micro-sized with one or two employees, and target small local markets rather than exporting or connecting to regional or global value chains, the report says.
In addition to credit constraints, many SMEs repotedly cite tax regulations, high taxes, scarce skills, and bureaucratic inefficiencies as obstacles to growth and therefore job creation.
Gendered social norms have limited female labor mobility and work opportunities, reflected by the fact that most women remain in unpaid work. Three-quarters of new jobs taken up by women between 2008 and 2018 were in non-wage self-employment or unpaid family work, much of which was farm work. Occupational segregation and social norms contribute to the large earnings gap between men and women, as per the report.
In order to improve job outcomes in Nepal, the report recommends policies focusing on fostering SME productivity and growth; improving the business environment and labor market policies; increasing the individual, family, and economy-wide benefits of international migration; and preparing and connecting women and youth to better jobs, including entrepreneurship.