Women Working in Nepal’s Informal Sector

Author: Shradha Khadka
Image: Anish Khatri (@kingstr_anish)

A sharp majority of people who enter the informal economy are compelled to take undocumented jobs due to the lack of access to formal means of earning a living. Job loss, destitute, lack of education, scarcity of skills, failure to meet requirements of formal jobs or failed implementation of employment laws and social security policies are some of the major factors that often push people towards the informal economy. Many jobs in the informal sector, given that they are often set up as a means to dodge formal institutions and regulations, thus provide bare minimum profitability to its average workers, and is often stigmatized as “shady” or illegal among communities they operate in. Still, given a lack of institutionalized clear pathways to formal employment, many engaged in the informal sector are simply trying to earn an honest living using whatever skills they possess.

According to the Nepal Central Bureau of Statistics (2019), 62.2% of the total workforce — accounting for almost 4.4 million Nepalese — are engaged in the informal sector. High levels of informality in a country’s economy is often characterized by various unwanted socio-political realities. Economists, political researchers, and government bodies alike associate the informal sector with widespread tax avoidance, irregular market prices, compromised quality of goods and services, and unregulated cash-based transactions. However, at the same time, it is also universally understood that a prominent informal sector signals the prevalence of a large number of workers that are significantly vulnerable to low and fluctuating income, low social standing, exploitation, difficult working conditions, harassment, hostile social environment and deprivation from fundamental rights and legal protection.

In the global context, a curious pattern arises when informal sector participation is viewed through the lens of gender. Whereas developing nations tend to have more men involved in informal work, the opposite is true in developing countries, wherein women are found to be comparatively more active in informal work. In Nepal, around 90.5 percent of total women citizens engaged in some kind of employment are involved in informal sectors (Nepal Labour Force Survey, 2018). Especially in household work, women share a disproportionate burden of unpaid labor. Much of their activities in domestic chores and their role as homemakers and caretakers are considered ‘invisible’. They are not accounted as work but are rather as ‘expected’ work by the prevailing patriarchal gender norms and age-old social work-division structures that are still present to this day.

Traditional societal norms often characterize women’s fulfillment with child rearing and domestic roles. Given the chronic poverty, resource scarcity, and financial dependence many women in Nepal find themselves under, this patriarchal line of thinking has further injected itself through time, which goes to mechanize restrictions on the financial freedoms of women across the country. Worldwide, over 2.7 billion women are legally restricted from being able to have the same choices of jobs as men, according to a study published by UN WOMEN in 2018. The same study posits that, among the 189 different national economies assessed, 104 economies were found to still have active laws preventing women from working in specific jobs. 50 economies were also found to have no laws on sexual harassment in the workplace, while 18 economies had legally endorsed pathways for husbands to prevent their wives from working without their consent.

Despite the fact that many women themselves are also raised with the internalization of the patriarchal fulfillment index of domestic and child-bearing activities, studies show that women across cultures do indeed actively seek for income generating opportunities, often as sole bread winners or as a means to supplement their male family member’s earnings, when pressed by dire poverty and resource scarcity. In fact, a growing concern around women’s rights advocates and activists today lies in the fact that more and more women are actively expected to bring income, and yet are also simultaneously expectedly to solely fulfill domestic duties as prescribed by centuries-old gender norms and cultural practices. Thus, for women who are deep in poverty, have the need for income, yet have never been invested in for generating income through formal means (through education, training, apprenticeships, etc.), the informal sector provides economic refuge. Thus, even though informal work often are not associated with clear career growth paths, confine upward mobility, come with legal risks, offer low pay, have often difficult and hostile working conditions, and are generally much less lucrative than formal sector work, many Nepali women find themselves working informally.

The ILO’s Decent Work agenda declares, just as Nepal 2015 constitution does, that it is a fundamental right of all citizens to be able to work and support themselves and their families irrespective of gender. However, the implementation of such paper declarations remains a distant reality in the Nepali context. The Nepal Labor Force Survey (2018) report shows that while the share of female employment in the informal sector is higher than that of men, as mentioned above, the converse share of women in the formal sector is dramatically low. A lack of technical know-how, market and investment knowledge, education and skills, personal property and savings (or legal access to ancestral property and savings, which are often inherited exclusively by sons), familial constraints, and fierce competition with men and the already prevailing gender-based wage gaps often restrict women from exploring employment opportunities in the formal sector.

To make matters worse, it is reported that many of the preexisting challenges that women were already facing have been exacerbated by the ongoing impacts of the global Covid-19 pandemic, that is estimated to directly affect close to 1.6 billion workers in the informal economic worldwide, according to a 2020 ILO study. With added responsibilities of familial health care, increased involvement in child care due to school closures, economic crises due to job less of self or family members, lack of social and legal protection, isolation-induced mental health problems, and many other reasons, the adverse effects of Covid-19 have been disproportionately pressing on women, and even more so on women working in the informal economy.

Although Nepal’s constitutional reforms promote women’s active presence and participation in governance matters, enable property ownership and advocacy of women’s rights aimed to enhance female representation, current policies and regulations still need to focus on Covid-19 pandemic related relief measures for women, sustainable livelihood possibilities, income protection, flexible and safe working arrangements, and access to quality care for family members. Policies, and actionable implementation plans with accountable transparency, that focus on women empowerment, training and education are therefore crucial in closing existing gender gaps and promoting inclusive economic growth.

The views and opinions expressed in the piece above are solely those of the original author(s) and contributor(s). They do not necessarily represent the views of Governance Monitoring Centre Nepal and/or Centre for Social Change.