Government data reveals a significant increase in unemployment across Nepal over the past three decades. The National Statistics Office (NSO) published the detailed findings of the Fourth Nepal Living Standards Survey 2022/23, reporting an unemployment rate of 12.6% in 2022/23. This marks a notable rise from the 4.9% unemployment rate recorded during the first Living Standards Survey in the fiscal year 1995/96.

According to the Fourth Living Standards Survey, youth unemployment is pervasive. The unemployment rate among individuals aged 15 to 24 has surged to 22.7%, up from 7.3% in 1995/96. The report highlights the profound challenges young people face in securing employment in Nepal. The survey report shows joblessness among people between the ages of 15 and 24 declined to 22.7% in 2022/23 from 23.9% in 2017/18.

Hem Raj Regmi, Deputy Chief Statistician at the NSO said that "the recent 1.2% rise in unemployment over five years is alarming. The economy has struggled to generate sufficient jobs, especially for our expanding young population." The demographic shift towards a younger working-age population and a decrease in the dependency ratio indicate a growing workforce, yet challenges persist in matching job supply with demand.

The demographic composition has tilted towards a younger workforce, characterized by a reduced proportion of children (0-14 years) and a higher share of adults (15-59 years). This shift is underscored by a declining dependency ratio, indicating an expanding working-age population. Concurrently, there has been a rise in the elderly population (60 years and above).

The survey data on employment status highlights profound changes in Nepal's labor market from 1995/96 to 2022/23. The proportion of employed individuals has decreased significantly from 67.2%to 32.4%, while those not in the labor force have risen from 29.4% to 62.9% over the same period. In terms of sectoral employment, wage employment in agriculture has drastically decreased from 70.7% to 1.9%, whereas wage employment in non-agricultural sectors has seen a notable increase from 9.5% to 56.6%. Overall, the survey indicates that 32.4 percent of the population is currently employed, 62.9% is not participating in the labor force, and 4.7% is unemployed.