The International Labour Organisation (ILO) has warned that frustration over poor job prospects and a lack of decent work can spill into political unrest, citing Nepal alongside Bangladesh and Sri Lanka as examples of the growing pressures facing young people in South Asia.

The ILO’s Global Employment Trends for Youth 2026: Back to the Future, released Tuesday, discusses the three South Asian countries in the context of growing youth frustration over employment prospects. It draws a broader parallel with the Gen-Z protests that swept Kenya in 2024 and 2025, saying those protests were fuelled by joblessness, corruption and a perception that political institutions were failing to meet young people’s expectations.

The report does not give a separate youth unemployment figure for Nepal in this section. Instead, it uses the country as an example of a broader trend in which frustration over poor job prospects and a lack of decent work can spill into political unrest.

The warning comes as young people worldwide face growing difficulty making the transition from education to work. The global youth unemployment rate rose to 12.4 percent in 2025, leaving about 67 million people aged 15 to 24 without jobs. Youth unemployment increased in eight of the world’s 11 subregions between 2023 and 2025.

Young people are also losing ground to older workers. In 2025, they were 3.4 times more likely than adults to be unemployed. While youth unemployment rose from 12.3 percent in 2023 to 12.4 percent in 2025, unemployment among people aged 25 and above fell from 3.7 percent to 3.6 percent.

The pressure is particularly acute for those seeking their first job. The ILO identified 18 countries where unemployment among people aged 20 to 24 had reached a decade-high, excluding the pandemic period. The list includes the United States, United Kingdom, Canada, Sweden, Austria, Denmark, Chile, South Africa and Sri Lanka. The report says the widening gap between young adults and prime-age workers suggests labour markets are increasingly disadvantaging new entrants.

The problem is not simply unemployment. In poorer economies, many young people cannot afford to remain without work and instead enter informal or insecure jobs.

In low- and lower-middle-income countries, nearly nine in 10 young workers aged 15 to 29 are in informal employment, leaving them with limited income security and access to social protection. This helps explain why some developing economies can report relatively low unemployment while still having deeply precarious youth labour markets.

That distinction matters for Nepal, where being counted as employed does not necessarily mean having a stable career. Young people working in informal, temporary or poorly paid jobs may have little job security, limited social protection and few opportunities for advancement.

The global supply of entry-level jobs is also changing. Many middle-skilled occupations that once provided young people with their first foothold in the labour market are shrinking. Clerical and administrative work, service and sales jobs, manufacturing positions and some technical occupations are among those under pressure.

That is creating an increasingly difficult “experience trap”: employers want workers with experience, but young people cannot acquire that experience without first getting hired.

The problem is particularly visible among graduates. The ILO notes that unemployment is rising among young people with higher levels of education in several regions. In India, for example, graduate unemployment has increased despite rising educational attainment. The report also points to growing concern over graduates competing for a shrinking pool of entry-level positions.

For Nepal, this has implications beyond the labour market. When education fails to lead to stable work, frustration can deepen among young people and weaken confidence in the institutions expected to deliver economic opportunity.

Artificial intelligence is adding another layer of uncertainty. The ILO estimates that 6.1 percent of jobs held by people aged 15 to 29 are in occupations highly exposed to AI-related changes. Many are middle-skilled jobs, including office and administrative positions that have been declining since 2023.

The report does not predict mass unemployment caused by AI. Instead, it says the technology is likely to change the tasks workers perform and reshape demand for skills. Employment is growing in knowledge-intensive fields such as science, engineering and healthcare, increasing pressure on young people to acquire skills suited to a changing labour market.

At the same time, one in five young people globally was not in employment, education or training in 2025, affecting more than 257 million people.

Young women face a particularly severe disadvantage. Globally, 27.4 percent of young women were NEET, meaning not in employment, education or training, in 2025, compared with 13.1 percent of young men. More than two-thirds of young people outside employment, education or training were women. The ILO attributes the gap to factors including unpaid care responsibilities, discrimination and limited access to quality jobs.

The ILO says governments need to treat youth employment as an economic and social policy priority rather than rely on a single intervention.

It recommends stronger job-creation policies, quality education and vocational training, apprenticeships and internships, better employment services and expanded social protection. Governments should also provide young people with better labour-market information and stronger links between education and employers.

The organisation also calls for targeted support for vulnerable young people, including young women and those already outside employment and education. Social protection should be extended to workers in informal, temporary, gig and self-employment arrangements.

For Nepal, the report’s message is clear: the challenge is not merely to reduce unemployment but to create credible pathways from education into stable, decent work.