In Nepal’s Ribdikot village, five-year-old Sujata begins her day before the sun rises. Sujata dreams of becoming a doctor to lift her family out of poverty and care for those in her community. Her parents, who never finished school themselves, share that hope.
Sujata’s hopes—and the hurdles she faces—are shared by many children across Nepal. But too often, these dreams run into hard limits. A new report by the World Bank — the Nepal Human Capital Review — tells the story of Nepal’s development through the lives of its people. It shows that, for many children, the path to opportunity remains frustratingly out of reach. At the report’s heart lies a powerful question: What would Nepal look like if every child like Sujata had the chance to reach their full potential?
The picture is sobering. By the time they reach age 18, a child born in Nepal today is expected to reach just half (51%) of their full productivity potential as an adult. Once the chance of gainful employment is factored in, that number falls to less than one-fifth (18%)—among the lowest in the world. These figures are estimated based on data combining survival, access and quality of education and health, and employment to estimate both the potential and actual use of human capital.
Place of birth matters, but it should not
The report finds that geography still plays a large role in shaping a child’s future. In Karnali—one of the country’s most remote and underserved provinces—children are expected to reach just 46% of their productivity potential, which is far below the average for lower-middle-income countries. By contrast, a child born in Bagmati, home to the capital and better services, is expected to reach 58%—a level similar to upper-middle-income economies.
These statistics reflect the daily realities of families like Sujata’s. In her village, a single teacher juggles multiple grades in an under-resourced classroom. The nearest public health facility is hours away and often lacks basic supplies. And for students who manage to finish school, good jobs are scarce and far from guaranteed.
From access to quality
To Nepal’s credit, the past decades have brought meaningful progress. More children than ever are in school. Life expectancy is rising. Most babies are now born in health facilities—a remarkable achievement compared to a generation ago. These gains show what’s possible with the right investments. But while access to education and healthcare has expanded, quality has remained elusive. Many children complete primary school without mastering basic reading and writing skills. One-third of working-age adults never completed primary education. Health services, though more widespread now, remain patchy—especially in remote areas.
Nutrition is another barrier holding children back. One in four Nepali children under five is stunted, a condition that permanently affects brain development and learning capacity. In regions like Karnali, that figure climbs to nearly 40%. For children like Sujata, the odds are stacked against them before they even set foot in a classroom.
For many Nepalis, even after investing in education and training, the road to a stable job is far from certain—especially so for girls. Between 2010 and 2018, only 4 in 10 new labor market entrants were able to secure paid employment. Most jobs are informal, low-paying, and offer little security or room for professional development. Young people are especially vulnerable—more than one-third of those aged 15 to 24 are not in education, employment, or training. For women, the challenges are even greater—only one in four is in the labor force.
Unlocking human potential, creating jobs
The report highlights that Nepal will need to create 6.5 million jobs over the next 30 years just to keep up with its growing working-age population. Meeting this challenge won’t be possible with business as usual.
The Government of Nepal’s 16th Plan—a five-year national development strategy—outlines the country’s ambitions and a path to achieving upper-middle-income status within the next two decades. But turning these aspirations into reality will require a bold rethinking of how the country invests in its people.
That means increasing public spending on education, healthcare, and nutrition, especially in places that have been left behind for too long. It means shifting the focus from mere access to quality of services—supporting teachers with training and tools, equipping public health facilities with skilled staff and medical supplies, and ensuring young children receive the care and learning support they need from the very start.
It also means forging closer connections between what is taught in classrooms and the realities of the job market. Expanding access to apprenticeships, career guidance, and hands-on learning is essential, as is strengthening the link between training providers and employers. To truly prepare the next generation, young people, especially those in underserved areas, need access to high-quality technical and vocational education, as well as opportunities to keep learning throughout their lives.
Nepal is at a crossroads. Its young population could be a powerful engine for growth—or a missed opportunity. Investing in the potential of children like Sujata isn’t just the right thing to do—it’s the smartest path to more and better jobs, faster growth, and a future where no child’s destiny is determined by the village they were born in.
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