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Causes and Measures of Unemployment in Nepal

Causes and Measures of Unemployment in Nepal
Causes and Measures of Unemployment in Nepal


Unemployment is the situation where people are willing and able to work but do not get specific work or jobs. Unemployment is the greatest problem in both developed and developing countries. It creates many types of problems in the nation like; poverty, robbery, theft, crime, etc. Every country emphasizes reducing the unemployment problem by creating job opportunities has become a major objective in all economies of the world. Unemployment is measured with the help of the unemployment rate.
Unemployment rate= Number of unemployed problems /labor force
:: Labour force= Unemployment person + employed force

Cause of Unemployment in Nepal

i. High-interest rate: High-interest rate is the major problem cause of unemployment. Increasing interest rates slow down economic activities. A rise in the interest rate causes an increase in the cost of borrowing. This causes the investment expenditure and consumer expenditure to fall and finally causes aggregated demand to fall and it leads to less labor for production and hence causes unemployment.

ii. Rapid population growth: Rapid population growth is a major cause of unemployment. In most developing countries, there is rapid population growth. The country cannot much more satisfaction to the citizen. Rapid population growth decreases employment opportunities, means, resources, etc. 

iii. Lack of infrastructure: Most underdeveloped and developing countries face this problem due to a lack of infrastructure. Infrastructure like; roads, power, telecommunication, highways, irrigation facilities in agriculture, financial institution, etc are required for the expansion of employment opportunities. 

iv. Slow industrial development: Slow industrial development is also a cause of unemployment. Lack of rapid industrial development leads to unemployment in the countries.

v. Slow economic growth: Many countries are underdeveloped and their economic growth is also slow due to slow economic growth. As the population grows, it is understood that the economy cannot meet the demand for employment and people cannot find work.

vii. Geographical Unemployment: Geography also occurs unemployment in the specific area the people. It is a form of unemployment caused by the instability of firms and workers moving from depressed areas. For example; Kathmandu city may have a variety of job markets with vacancies, but an unemployed person from Karnali needed help to attempt to take a job in Kathmandu due to difficulties in moving from Karnali to Kathmandu.

viii. Poverty: Poverty is also a kind of cause of unemployment. Poverty and unemployment are interrelated with each other. Poverty direct reflects unemployment in the countries. Poverty becomes an obstacle to education, where education plays an important role in employment.

Some other causes of Unemployment
  • Global recession:
  • Frictional unemployment:
  • Structural unemployment:
  • Technological changes:
  • Real wage unemployment: 
  • Unequal distribution of land:
  • Less saving and investment:
  • Seasonal agriculture: 

Measures of Unemployment:

i. Rapid industrial development: slow industrial development is a cause of unemployment. Rapid industrialization is a branch of employment to get employment opportunities to the citizen. Rapid industrialization creates a good business environment for employment opportunities. So, Rapid industrial development is necessary for employment opportunities in the nation. 

ii. Development of agriculture: The development of the agricultural sector also helps to create employment opportunities in the nation. Most of the farmers are producing limited crops by using low-quality seeds, the traditional method of production, lack of irrigation facilities, etc. To create employment opportunities in the agriculture sector government should provide irrigation projects, and provide quality seeds, fertilizer, and modern technology. etc. 

iii. Development of infrastructure: In developing countries, there is a lack of infrastructure development like; roads, transportation, communication, banking, market, etc. creating unemployment in the nation. To create employment opportunities in the nation, there must be development infrastructure. The government has to develop infrastructure so that rural areas can be linked to the main market. After linking with the main market there is a chance of employment opportunities for the people.  
iv. Education reforms: Education plays an important role in developing employment opportunities. It should be made more vocational at both school and university levels. It increases employment or self-em[ployment in both urban and rural areas. Educational systems generate more employment opportunities in the countries. 

v. Skill development programs and training: Skill development and training are important for employment opportunities. Skill development programs and training like; plumbers, Teachers, and electricians,  should be organized in the underdeveloped sector. Schools and universities also have to conduct skill development and training for the student for better employment opportunities.  

Some other measures of Unemployment
  • Increase in peace of economic growth: 
  • Credit facility:
  • Development of cottage and small-scale industries:
  • Use of labor-intensive technique: 
  • Tax cuts:
  • Reducing the interest rate:
  • Increasing government expenditure on public work:
  • Creating a favorable environment for foreign investments: 

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