The interrelation between population dynamics and employment will determine our economic trajectory for the future.

BY Sagoon Bhetwal

The National Statistical Office (NSO) conducted the 12th National Census of Nepal in 2021. NSO, after a long wait, released the Nepal Population and Housing Census 2021 National Report in March. According to the report, the population size of Nepal is 29,164,578 as of November 2021. However, the annual average population growth rate has fallen from 1.35% in 2011 to 0.92 in 2021. Further, data on population and economic engagement provides  significant insights into the situation of employment in Nepal. This article explores what employment has looked like in Nepal and how the changing nature of our population will affect employment in the years to come.
Unemployment in Nepal
The census defines economically active population as individuals above the age of 10 years ‘who either performed any economic work for any length of time irrespective of whether they searched for work or not, or searched for work (part time or full time) if they had not performed any economic work in the last 12 months preceding the census.’ The census data shows that the total population above the age of ten years is 23,958,868, out of which, 65.5% and 34.3% have been classified as economically active and not economically active, respectively. Further, if such work engagement or search for work has been done for six months or more, then that individual is usually economically active. 
According to The Nepal Labour Force Survey 2017/18, ‘a person must be completely without work, currently available to work, and taking active steps to find work’ simultaneously to be considered unemployed. The census data shows that out of the ‘usually economically active’ population (11,038,105 persons), 6.95% are unemployed.
We can presume that many individuals seeking employment haven’t been able to receive one because of inadequate opportunities. The inability of people to secure jobs even after actively searching for six months should be a matter of great concern.
Further, provincial breakdown shows that out of seven provinces, Madhesh, Bagmati, and Lumbini have the highest percentage of unemployed persons out of the economically active population of ten years and above. On the other hand, 4,651,672 persons are not usually active (the total number of months actually worked and searched for is less than six months), which calls for attention and effort to expand secured employment opportunities.
There are various reasons why the rest of the population aged ten years and above remain ‘not economically active’. The top three causes include being a student (46.9%), doing household chores (21.9%), and being aged (11%). Specifically, of the 1,967,486 persons who cited household chores, 12.15% were male, while 87.85% were female. Such gendered division of household responsibilities has barred the female population from engaging in economic activities. It is only by changing societal perception of labour and with shared household work that we can ensure the economic participation of women for their independence and also the economic growth of the country.
Changing Population Composition and Impact on Employment
Another important highlight from the census data is the changing population composition in terms of age. Between 2011 and 2022, as shown in Figure 2, the population aged 14 and below has declined while those aged 15-59 and above 60 have increased. The growing working-aged population signifies the demographic window of opportunity that Nepal currently experiences. The National Planning Commission of Nepal states that ‘the demographic window of opportunity is a period of time in a nation’s demographic evolution
when the proportion of the working-age population is particularly prominent.’ In Nepal, this window began in approximately 1992 and is expected to conclude around 2047. However, alongside this phenomenon, Nepal is also experiencing a growing elderly population and a simultaneous decline in birth rates. 
Nepal is now expected to transition into an ageing society (when the population aged 65+ years makes up 7% or more of the total population) at around 2028 and will become an aged society (when the population aged 65+ years makes up 14% or more of the total population) at around 2054. While we need to utilise this surge in our working-age population, we must start preparing to accommodate the elderly population better. Slowly, the responsibility upon the working-age population to support the old age dependents will substantially increase. It is hence up to our policymakers to better plan old-age support and social security schemes.
Migration will likely be another major factor shaping Nepal’s population demographic and employment status. As per the 2021 Census, the main reason for migration is marriage (38.2%), followed by work/job (15.2%). Likewise, the total absent population living abroad reached 2,190,592 persons in 2022, a rise from 1,921,494 in 2011. It is necessary to study further the reasons for migration and their implications on the population composition and economic engagement in the country to reap the benefits of our existing demographic dividend.
In conclusion, we must pay serious attention to the changing population trends that will determine employment and its impacts. On one hand, attention is needed to the current employment scenario and initiations to create better opportunities. At the same time, it is crucial to prioritise policy planning to better cater to our dependent population. The interrelation between population dynamics and employment will surely determine the economic trajectory that Nepal will witness in decades ahead. 
(Bhetwal is a Research and Program Assistant at Nepal Institute for Policy Research (NIPoRe), a Kathmandu-based think tank that works on high-priority policy issues from Nepal and Asia.)