Nepal Jobs Diagnostic
Nepal’s economy is gradually shifting from largely subsistence agriculture to more modern industry and services. Agriculture’s share of domestic output and employment is declining, industry is holding steady and services now account for over half o...
| Main Authors: | , , |
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| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/501501592797725280/Nepal-Jobs-Diagnostic http://hdl.handle.net/10986/33956 |
| Summary: | Nepal’s economy is gradually shifting
from largely subsistence agriculture to more modern industry
and services. Agriculture’s share of domestic output and
employment is declining, industry is holding steady and
services now account for over half of total domestic
production. In the last two decades, large numbers of men
have entered jobs in construction, manufacturing, commerce
and transportation, among others; even though most of these
are informal jobs1 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 slow due to the prevalence of subsistence activities.
Nepal remains a largely agrarian economy characterized by
small-scale family farming using traditional methods and
producing primarily for household consumption. Six in 10
workers are engaged in agriculture but generate only
one-third of total output (Figures 0.1a and 0.1b). Over half
of the labor force does not produce enough output on their
farms or in their households to generate surplus to sell in
the market. The policy interventions to improve job outcomes
in Nepal presented here are considered through four main
channels: (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. Firms of all sizes need
to become more competitive to expand production and create
more jobs, including better quality jobs requiring higher
skills. Entrepreneurs (including the self-employed) need to
differentiate their products and services and identify new
markets. This includes rural producers, especially women.
Updating methods to increase yields and product quality and
integrating into value-chains would raise rural productivity
and earnings. To grow, SMEs need policies to facilitate
access to finance and business knowledge, reduce regulatory
and tax burdens, and improve market connectivity. Increasing
the returns to migration—for both the migrant worker and the
sending family, will boost job quality and household
earnings, with positive economic spillovers. Expanding women
and youth access to better jobs in a wider range of
activities, and ensuring they have the necessary skills to
succeed, will accelerate structural transformation and boost
labor earnings. Strengthening guidance for schoolchildren
and out-of-school youth to prepare them for the labor market
will increase the relevance of their skills. And expanding
access to assets, services, know-how and networks for
informal producers and entrepreneurs in both urban and rural
markets will enhance productivity and living standards. |
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