Socio-Economic Impacts of Labor Migration in Nepal


Most of the migrant workers abroad are working in vulnerable situations without any effective legal protection by the Nepalese government or the receiving countries’ government

By Deepak Gajurel

Deepak GajurelAn estimated three million Nepalis are migrant workers who have gone abroad earning foreign currencies. The nation, with 26.4 million population, has sent more than 10 percent of its people to work far away, who are of productive age group, i.e. from 20 to 40 years of age. This figure does not include the population who are employed in India, estimated to be around 3 million. Since Nepalis do not need visa and work-permit to work in Indian job market, no exact figure can be maintained and obtained for this trend that dates back centuries.

Government data shows that a majority of the migrant Nepali workers are engaged in 3D works (Difficult, Dirty, Dangerous works) in various countries, from Qatar to Malaysia and from South Korea to Israel.1 However, negligible portions of this work force has found managerial or some kind of ‘decent’ jobs in the host countries.

The number of Nepali workers leaving home for foreign employment is increasing every year. An official figure shows that a total of 527,814 Nepali men and women (number of women are insignificant, though) left the country in a single year, fiscal year 2013-2014, ending mid-July. This is 16.4 percent upward graph than that of previous fiscal year.2

Data maintained by Department of Foreign Employment (DoFE) does not include records of individuals who leave the country for foreign employment illegally via India or with support of middlemen.

  1. History of labor migration in Nepal

The history of formal labor migration begins in 1814-1816, after the Nepal-British India war. A total of 4,650 Nepalese youngsters were recruited to the British armed forces as a British-Gurkha regiment after the conclusion of the war and signing of the Treaty of Sugauli in 1816.

Similarly, the migration of Nepalese people for other employment purposes, such as working in the tea states of Darjeeling and the forest of Assam, India, began in the second half of the 19th century. Economic migration to the Middle East from South Asia and other parts of the world was spurred-on by the oil boom in the early 1970s.

International labor migration, mostly to Gulf States, Malaysia and other South East Asian countries is a new phenomenon of migration in the Nepali context with about a 30 years’ history. Unexpectedly, foreign labor migration has developed in such a way that it has shifted the agricultural-based Nepali economy towards remittance-based economy.

  1. Impacts on economy

According to a recent report brought out by the country’s central bank, Nepal Rastra Bank, Nepal received 5.5 billion US dollars in remittance during last fiscal year, ending mid-July 2014, an increase from 4.3 billion US dollars in the previous one.3

The rise in remittance income boosted the country’s foreign exchange reserve as well as put the country’s overall Balance of Payment (BoP) into surplus. The gross foreign exchange reserve reached to 6.7 billion US dollars in mid-July 2014, up from $5.4 billion recorded in mid-July last year, the same report says. For a country with around $ 6 billion US dollars of annual budget, remittance has been a major chunk of Nepal’s foreign currency earning sources.

Most of this foreign currency comes from the unskilled or semi-skilled workers, majority of whom shed their sweat in the hot climate of the Gulf countries, including Qatar, Saudi Arabia and United Arab Emirates.

Qatar alone is providing employment to six hundred thousand Nepali workers, according to a report.4 Most of these Nepalis work in construction activities, such as building and road construction.

The government statistics show that 74 percent Nepali workers employed in foreign labor markets are unskilled. Such workers normally choose to leave for low paying labor destinations.5 Though the government grants permissions to work in 109 countries for foreign employment, a majority of workers are leaving for countries like Malaysia, Qatar, United Arab Emirates, Saudi Arabia and Kuwait.

The direct impact of remittance to nation’s GDP would be only one side of the whole story, as the other side would clarify how this global phenomenon has indirectly resulted in poverty reduction, employment generation, increasing household income and capital formation in the nation.

Remittance and migration driven economy has reduced poverty in Nepal from 42 percent in 1996 to 25.16 percent in 2012, according to Nepal Living Standard Survey-3.6

Downward graph of poverty has helped in diversification in livelihoods, greater ownership and acquirement of assets and capitals. This, in turn, has contributed in increased financial capital, education of the children, social capital, and migration-specific knowledge.

  1. Pushing/pulling factors behind labor migration

The pushing and pulling factors behind labor migration are almost the same in Nepal as in other parts of the world. Poverty, limited employment opportunities, deteriorating agricultural productivity, and armed conflict are some of the motives behind international labor migration.

There are many villages in Nepal where labor migration has been established as a culture of the communities; that is, going abroad for work for awhile and returning with some money and the experience of living in a different geographical location, preferably in towns and cities. The influence of friends, relatives and well-wishers has also played a prominent role in the promotion of labor migration in this Himalayan nation.

Youth population displaced by Maoist-led 10 years-long armed conflict (1996-2006) found foreign employment a lucrative and safe alternative for a living and safety, which in time turned to be a necessity for them.

  1. Impacts on Nepali society

More than one sector has been affected by Labor migration in Nepal. Some notable variables of this effect are: internal migration, increase in drug addiction, family breakups, single spouses, bad orientations of children etc.

Families having increased income from remittance tend to migrate from villages to urban areas, where they spend, not invest, money for luxurious lifestyle. ‘Growing towns and cities across the country is an indication of money spent in ‘better’ living,’ says Tribhuvan University economist Bhagwat Mishra. Mishra further opines, ‘Very little of the remittance has been brought into nation’s infrastructure development.’

‘Some of the young members of the remittance earning families have been found indulged into drug addition, fly-away from education and training’ according to one news report.7 Family breakaway is another implication of labor migration in the Nepali society. Sociologist Pawan Sharma sees a different picture painted by quick-earned wealth. ‘While husband is away for a long period of time and money he sends back home is affluent, wife generally finds herself in lonely and isolated situation. Psychological state and physical needs makes things worse, sometimes breaking the family’ Sharma interprets.

  1. Perils of labor migration

Most of the migrant workers abroad are working in vulnerable situations without any effective legal protection by the Nepalese government or the receiving countries’ government.8 Workplace exploitation by employers are reported frequently. However, the Nepalese government has not been effective in protecting its citizens. Frequent serious cases are reported in the news media about the pathetic situation of Nepalese migrants working in unauthorized countries without any legal or social protection by the host countries.9

International provisions are found to be very sound and applicable in the protection of the rights of migrant workers but governments in both sending and receiving countries do not seem genuine in their domestication of the spirit of international instruments, conference recommendations and plans of action.10

  1. Efforts by the government to deal with the implications of labor migration

Giving importance to labor migration and remittance, Nepal Government has formulated appropriate policies and programs for the betterment of labor migrants. Several legal frame works, Foreign Employment Act 2012 is an example, are in place which regulate the ‘Manpower Companies,’ remittance handling financial institutions and others.

However, in practice, frequent complaints come up on issues of implementations of the policies and legal provisions.

Experts suggest some concrete measures to be taken in this regards. Bilateral agreements, with the governments of the destination countries in order to increase the number of jobs for Nepalis, increase security as well as improve the migrants’ working conditions, have to be reached.


  1. Ministry of Labour and Employment, (2014). Labour Migration for Employment, A Status Report for Nepal: 2013/2014. Government of Nepal, Department of Foreign Employment.
  2. Ibid.
  3. My Republica, Aug 25, 2014 (Retrived November 25, 2014)
  4. BBC Nepali Service. November 12, 2014 (
  5. The Himalayan Times Daily. (, (Retrieved, November 27, 2014)
  6. Adhikary, J & Gurung, G. (2012). Foreign Employment, Remittance and Its contribution to economy of Nepal. Government of Nepal and International Organization of Migration
  7. Naya Patrika Daily. ( April 14, 2013
  8. Centre for the Study of Labour and Mobility. (2014). State of Mitration in Nepal. Kathmandu
  9. (Retrieved November 24, 2014)
  10. Ibid.

Deepak Gajurel is Assistant Professor of Political Science, Tribhuvan University, Kathmadu, Nepal. He can be reached at:

Courtesy: SOCDEM Asia Quarterly, Vol. 3; Issue1; January 2015.