Nepal is witnessing an alarming trend—its youth, the backbone of the country, are leaving in droves in search of better opportunities abroad. This mass exodus is not just a migration story; it is a consequence of economic disparity, limited opportunities, and systemic failure to retain its brightest minds.

Over the past three decades, nearly 6.8m Nepalis have received labor approval for overseas jobs (excluding India), with an estimated 1,700 leaving daily. The Department of Foreign Employment (DoFE) estimates that an additional 1.5m–1.7m Nepalis are working in India, while many others bypass formal channels to seek opportunities elsewhere. On top of this, over 100,000 students leave Nepal annually for studies abroad.

Despite Nepal’s economic growth in recent years, wealth remains concentrated in the hands of a few. Rural communities continue to suffer from limited access to quality education, healthcare, and employment. The lack of industrialization and sustainable job opportunities forces thousands of youths to seek employment in foreign lands, particularly in the Gulf nations, Malaysia, and beyond.

Even educated youths are struggling. Many university graduates find themselves unemployed or working in low-paying jobs unrelated to their fields of study. The mismatch between education and market demand has left an entire generation disillusioned, forcing them to look elsewhere for stability and prosperity.

The fourth Nepal Living Standard Survey report, published by the National Statistics Office in June 2024, shows that the unemployment rate climbed up to 12.6 percent in 2022-23 from 11.4 percent in 2017-18, representing a 1.2 percent rise in the five-year period. The unemployment rate has risen from 4.9 percent in 1995-96 to 12.6 percent in 2022-23.

The situation is even more dire for younger workers. Among those aged 15-24, the unemployment rate jumped from 7.3 percent in 1995-96 to 22.7 percent in 2022-23. The report said this highlights the challenge of finding jobs for youths in Nepal. 

The survey also shows that only 32.4 percent of the population is employed, while 62.9 percent are not in the labor force, and 4.7 percent are unemployed. These figures underscore the scale of the problem.

While average per capita income has risen significantly—from Rs 7,690 to Rs 136,707 over the past few decades—this growth has been highly uneven. The richest 20 percent saw their per capita income surge from Rs 19,325 to Rs 259,867, while the poorest 20 percent experienced only a modest increase, from Rs 2,020 to Rs 61,335. This stark disparity is a key driver of rising unemployment and mass youth migration.

Nepal’s income inequality, as measured by the Gini coefficient, has worsened over the years. In 2010/11, Nepal already had one of the highest levels of income inequality globally, and this gap has only widened since. By 2019, the income Gini coefficient had risen further, reflecting growing disparity.

Wealth inequality is even more extreme. The Palma Ratio, which compares the income share of the richest 10 percent to that of the poorest 40 percent, shows that Nepal’s richest 10 percent earn more than three times the income of the poorest 40 percent. Their wealth is over 26 times greater.

During the first Nepal Living Standards Survey in 1995, the poorest 20 percent of the population held only 5.6 percent of the total wealth, while the richest 20 percent controlled around 50 percent. The survey continued in 2010 and 2024, showing a rising trend for both groups, with the wealth share of the richest 20 percent now reaching 56 percent, says economist Chandra Mani Adhikari.

This uneven distribution of wealth has created a system where resources—education, employment opportunities, and access to capital—are concentrated among a small elite. Wealthier families can afford private schooling, overseas education, and business investments, ensuring their children access to high-paying jobs or entrepreneurial success. Meanwhile, lower-income youth, particularly in rural areas, struggle with poor educational infrastructure, lack of vocational training, and limited job prospects.

The government’s failure to address this gap has resulted in a labor market that systematically favors the privileged. Public education and vocational training programs remain underfunded, leaving many young people with few pathways to employment. Without robust skill-development initiatives, many are forced to choose between low-wage informal jobs or seeking opportunities abroad.

Economist Adhikari explains, “Once money began influencing Parliament and the government, policies started prioritizing large corporations over ordinary citizens.” In Nepal, economic policies heavily favor the affluent. “Big corporations and landowners benefit from tax cuts, subsidies, and easy access to loans, while small businesses and startups are bogged down by bureaucratic hurdles and limited financial support,” he notes. “This creates an environment where young entrepreneurs from lower-income backgrounds struggle to compete, reinforcing a system where only the wealthy can succeed.”

He further adds, “Nepal’s governance is controlled by a small, wealthy elite that designs policies to maintain their economic power.” Rather than focusing on industrialization or job creation, economic policies prioritize imports and service sectors dominated by the rich. The lack of industrial development severely restricts employment opportunities, forcing skilled and semi-skilled workers to seek work abroad. “A growing share of the service sector in GDP only exacerbates economic inequality,” Adhikari concludes.

Furthermore, while remittances contribute to nearly 29 percent of GDP, the funds primarily sustain daily consumption rather than being reinvested into productive sectors. The elite class, meanwhile, dominates high-profit industries like banking, real estate, and large-scale import businesses, limiting the economic space available for young professionals and workers to establish themselves.

The dependence on remittances has also created a paradox—while foreign employment helps individual families, it weakens the country’s long-term prospects by depriving Nepal of its skilled workforce. Many skilled workers—engineers, IT professionals, nurses, and hospitality workers—are leaving, creating a brain drain that could take decades to reverse.

Nepal’s literacy rate for youths (15–24 years) is over 90 percent, but many lack access to quality higher education or vocational training. During an interview with ApEx, former member secretary of the Council for Technical Education and Vocational Training (CTEVT) Ramhari Lamichhane said that the government has prioritized technical and vocational education, but it’s limited to policy documents. “It has stated that 70 percent of students will receive technical education, but there is no clarity on what kind of technical education this entails,” he says.

About a decade ago, there were around 800 institutions affiliated with CTEVT, but today, that number has grown to approximately 1,700. However, Lamichhane points out a concerning trend: When there were 800 institutions, 56,000 students were enrolled in technical education, but now, despite the increase in institutions, there are only 38,000 students.

A 2021 report by the International Labor Organization (ILO) found that over 60 percent of Nepali youths are either underemployed or working in jobs that do not match their qualifications. An estimated 1,500 highly skilled professionals—doctors, engineers, IT experts—leave Nepal annually for better opportunities abroad.

If current economic conditions persist, youth migration is expected to increase, with an estimated 600,000–700,000 Nepalis leaving annually by 2030. Nepal’s economy is projected to grow at a modest rate of four to five percent annually, which may not be sufficient to create enough jobs for its growing youth population.

“Only a handful of youths connected to the elites are benefiting,” says sociologist Pranab Kharel. “The elites are not only making money within Nepal but also taking it abroad, which means future opportunities are almost nonexistent, and it negatively impacts the youth.” According to him, this will not only widen economic inequality but also exacerbate racial, communal, and gender disparities, intensifying various forms of social injustice.

In 2019, the Prime Minister’s Employment Program was launched, but its impact remained limited due to poor implementation. In 2020, the government introduced a Rs 2bn Covid-19 relief package to provide temporary support for returning migrant workers. In 2021, amendments to the Foreign Employment Act were introduced to strengthen protections for migrant workers. The government then shifted its focus to digital employment in 2022, allocating Rs 3bn to promote remote work and IT jobs. But despite numerous political promises, the government has failed to create a sustainable environment for job creation and economic development. 

The Palma Ratio, which compares the income share of the richest 10 percent to that of the poorest 40 percent, shows that Nepal’s richest 10 percent earn more than three times the income of the poorest 40 percent. Their wealth is over 26 times greater

These programs, meant to support employment—such as youth entrepreneurship funds and skill-training initiatives—rarely reach the most vulnerable. Bureaucratic inefficiencies, corruption, and an unstable political climate further discourage young entrepreneurs and investors from staying in Nepal. Programs aimed at youth employment often lack proper implementation and fail to address the core issue: the absence of a thriving industrial and business ecosystem. As a result, despite various initiatives, youth unemployment remains high, and migration continues to be seen as the only viable path to financial stability for many.

Reversing the youth exodus requires a multi-pronged approach. Economic reform is crucial, with a focus on encouraging industrial growth, promoting entrepreneurship, and investing in key sectors such as technology, agriculture, and tourism to generate employment opportunities. Education reform is equally important, as aligning education with market demand and fostering skill-based training can help bridge the unemployment gap.

Government accountability is also vital. Creating a corruption-free and investment-friendly environment can encourage businesses to thrive and generate more jobs at home. Empowering youth by supporting startups, providing financial incentives, and ensuring a fair job market can help retain talent and reduce the outflow of young workers.

Nepali youths are not leaving just for money; they are leaving for dignity, security, and opportunity. If Nepal fails to address the root causes of economic disparity, the country risks losing its most valuable asset—its youth. It is high time that policymakers, businesses, and society work together to create an environment where young Nepalis see a future within their own country, rather than beyond its borders.