Exporting talent, importing money: Nepal, youth migration, and remittances

Labor migration from Nepal to various countries has reached historically high levels in recent years, generating huge flows of foreign remittances into the Nepalese economy. While this has obvious benefits, Aashiyana Adhikari analyzes the complex impact of large-scale youth migration from rural areas to urban/foreign destinations on the Nepalese economy and society.

With a population of 30.55 million, Nepal is experiencing a significant demographic shift. Young people aged 16 to 25 constitute approximately 20.8 percent of the total population, while those aged 16 to 40 account for 40.68 percent. This demographic profile highlights Nepal's first demographic dividend, its "youth bulge" or "population dividend," where a substantial portion of the nation's population is young. Typically, this presents a unique opportunity for accelerated economic growth and development. However, over the past decade, there has been a marked increase in the number of young Nepalese workers migrating abroad in search of better educational and employment opportunities. This trend has a dual economic impact: it significantly boosts the Gross Domestic Product (GDP) through remittances sent home.

Reliance on Remittances

Personal remittances contribute significantly to Nepal's economy, accounting for 22.8% of total GDP, one of the highest rates in the world. These remittances play a crucial role in reducing poverty and boosting consumption.

Migration from Nepal is not a new phenomenon; historically, it is deeply rooted in the pursuit of economic opportunities. In earlier times, trade initiated some of the earliest movements of people out of Nepal. In recent times, the pattern of migration from Nepal has evolved, both in scale and global reach, beyond the traditional seasonal migration to India.

The expansion of global economies and the availability of jobs, particularly in the construction and home sectors in the Gulf countries and Malaysia in Southeast Asia, have attracted large numbers of Nepali workers. These jobs often offer higher wages than similar positions in Nepal.

Migrant families often experience significant improvements in their standard of living thanks to remittances, while those left without these financial resources remain economically stagnant.

The challenges posed by youth migration and economic dependence on remittances underscore the urgent need for comprehensive action to boost Nepal's future. While remittances constitute a crucial economic lifeline for the country,

By: Aashiyana Adhikari