# INTRODUCTION

Female labor force participation (FLFP) in South Asia has been a focus of policy concerns for the past decade. The average participation levels in the region remain among the lowest in the world and have stayed at around 30 percent since the early 2000s.<sup>2</sup> Nepal is no exception. Labor force participation for Nepali women aged 1564 was only 26.3 percent in 2017-2018, compared to 53.8 percent among working-age Nepali men.<sup>3</sup> The drivers behind these low levels of economic participation have included the stage of economic growth, following Goldin’s (1995) U-shaped relationship between female employment and the transition out of agriculture to services; the structure of a country’s economy (Klasen, 2019); women’s human capital and returns to education (Peet et al., 2015; Chicoine, 2021); access to services such as childcare (Halim, Perova and Reynolds, 2023a); and safe transport (Field and Vyborny, 2022; Buchmann et al., 2023). In the case of South Asia, social norms are also frequently discussed as a factor preventing women’s participation in the labor market (Jayachandran 2021; Bussolo et al., 2024), whether by themselves or in combination with the more traditional supply and demand-side barriers discussed in the literature (for example, Deshpande and Kabeer, 2024; Deshpande and Singh, 2021).

In Nepal, a high share of women outside the labor force are engaged in subsistence farming for household consumption as their main economic activity, owing to Nepal being a highly rural economy. And while the economy is shifting away from agriculture, and jobs created over the last decade have been a mix of low- and high-productivity in industry and service sectors, men have benefitted disproportionately. Of the 3.8 million new wage jobs added to the economy by 2018, men took up over two-thirds of those jobs (Ruppert Bulmer, 2020), including jobs in manufacturing, finance, and business services sectors. These outcomes cannot be explained by Nepali women’s education levels – progress in educational attainment of girls is sizable and women enjoy high returns to education (Ruppert Bulmer et al., 2020).<sup>4</sup> Young women, particularly married ones, have low attachment to the labor market. Nearly half (47 percent) of them are not in employment, education, or training (NEET), vs. 22 percent of young men.<sup>5</sup> Over a third of young married women aged 20 and 24 report to not have done any work other than housework in the 12 months before the 2022 Nepal Demographics and Health Survey (DHS), as compared to three percent of young married men within the same age group. Social norms related to the unequal gender roles in families may compel women to shoulder a disproportionate burden of household work, thereby reducing their availability for wage employment and restricting them to jobs with lower employment potential than men. Women are more likely than men to be in unpaid farm work (6 million women compared to 2.8 million men). They also work, on average, 9 hours per week less than men do, which partly explains a gender gap in mean monthly earnings of almost 6,000 Nepali rupees (NPR) in favor of men (Ruppert Bulmer et al., 2020).

2 World Development Indicators (WDI), latest year available. Modeled ILO LFP. The modeled ILO comparable number for FLFP in Nepal is 29 percent in 2016, an increase from 22 percent in 2003.

3 Source: Nepal Labor Force Survey 2017/2018. The labor force participation rate is a measure of the proportion of a country's working-age population (individuals 15 years and older) that engages actively in the labor market, either by working or looking for work. Following the 19<sup>th</sup> International Conference of Labour Statisticians in 2013 – the new standards that Nepal adopted for the Labor Force Survey in 2017/18 – labor force participation includes work performed for pay, profit, or family income, and excludes subsistence work (production for own final use), whether in agriculture or in non-agriculture family or household enterprises. In past publications (e.g., Ruppert Bulmer et al., 2020), women’s labor force participation was estimated at 75 percent using the 2017/2018 Labor Force Survey as subsistence activities were counted in the definition of work.

4 Over the last three decades, women achieved strong education gains. Average years of schooling rose from 2 years for females born in 1960 to over 9 years for those born after 1990. A woman with a college degree, on average, earns double what a woman with incomplete primary earns, controlling for sector of work and other factors (Ruppert Bulmer et al. 2020).

> 5 Nepal Labor Force Survey 2017/2018.

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