World Bank/Mila Production
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The Nepal Human Capital Review (NHCR) is part of the World Bank Group¡¯s Human Capital Project¡ªa global initiative built on a simple but powerful idea: investing in people is the most effective path to better jobs, higher incomes, and long-term economic growth.
Global evidence is clear: countries that prioritize investments in human capital¡ªeducation, health, and nutrition¡ªare more likely to thrive. When they don¡¯t, the costs are high. Individuals are held back, and entire generations lose the opportunity to build better lives.
Bringing this global lens to Nepal, the NHCR uses the Human Capital Index (HCI)¡ªa forward-looking measure of productivity potential¡ªto assess the state of human capital across the country, revealing significant disparities at both the national and provincial levels.
Nepal¡¯s HCI score stands at 0.51, meaning a child born today is expected to reach only 51 percent of their full productivity potential by age 18. Limited access to quality education, healthcare, and nutrition means that half of a child¡¯s productivity potential will never be unrealized. Beneath this national average lie even deeper inequalities. While a child born in the more urban and better-connected areas of Bagmati, near the capital Kathmandu, is expected to reach 58 percent of their productivity potential, a child born in the remote hills of Karnali is expected to reach only 46 percent.
| Nepal Human Capital Review
But low levels of human capital accumulation are only part of the challenge. The NHCR also highlights the country¡¯s struggle to use the human capital of its people. Many young people, face difficulty entering the labor market, even after completing their education. Given these low employment rates, a child born today is expected to achieve just 18 percent of their productivity potential¡ªone of the lowest rates globally. Limited job creation, widespread informality, and low female labor force participation continue to hinder Nepal¡¯s ability to translate human capital into increased productivity and economic growth.
This report provides a comprehensive diagnostic of Nepal¡¯s human capital landscape and offers concrete policy recommendations to help the country unlock its people's full productivity potential
Last Updated: Aug 11, 2025