Impact of Covid-19 Pandemic on Employment in Middle-Order Cities of Nepal

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Covid-19 pandemic has deeply disrupted economic activities globally. Initial lockdowns, repeated surges in infection rates, and extended disruptions in movement of goods and people continue to slow the recovery process. Because economic activities and job opportunities are concentrated in urban areas and infection rates tend to be higher, the economic impact of the pandemic is most pronounced in the cities. As is the case elsewhere, cities in Nepal have suddenly been forced to cope with rising unemployment and income loss across businesses.

This paper takes stock of the post-pandemic urban unemployment problem in Nepal. The paper analyses data from two intercity corridors, one specializing in manufacturing and the other in agriculture. The research was conducted in middle-order cities with a population range of 100-200,000. The economies in these areas tend to be diversified and at the same time are connected to larger cities and the rural hinterlands. These characteristics make the middle-order cities ideal proxies to understand what is happening in the broader urban economy. Findings show that problems are deep and structural, undergirded by an overall demand slump, sectors that generate large number of low-threshold jobs such as construction and tourism will take much longer to recover than earlier estimated, and government recovery programs have to be sectorally and geographically customized to spur recovery and provide relief to households.

Posted April 27, 2021
Related locations: Nepal
Related programs: Inclusive Economic Growth
Related topics: Covid-19

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