Who Pays for Migration? In Nepal, Workers Bear the Risk Before They Leave

Nepal’s first nationally representative survey of migrant recruitment costs has found that nearly two-thirds of workers paid fees before taking up jobs overseas, with the average worker needing 3.3 months of destination-country earnings to recover those expenses. The findings give policymakers a national benchmark for measuring recruitment practices while highlighting how debt, informal brokers and unequal earning opportunities can weaken the economic benefits of labour migration.

For thousands of Nepali households, overseas employment offers a route to higher incomes and greater financial security. However, Nepal's first nationally representative survey of migrant recruitment costs shows that many workers begin that journey at a disadvantage, surrendering months of future earnings to fees before they receive their first pay cheque.

A new report by Nepal's National Statistics Office, prepared with technical support from the International Labour Organization (ILO), provides the country's first comprehensive national assessment of recruitment fees and related expenses paid by migrant workers.

The report, The Cost of Labour Migration in Nepal: Evidence from the 2023 Recruitment Cost Survey of Migrant Workers, establishes a baseline for tracking Sustainable Development Goal Indicator 10.7.1. The indicator measures recruitment costs as a proportion of a worker's monthly income in the destination country.

Nearly two-thirds of surveyed migrant workers paid recruitment-related fees before obtaining employment overseas. On average, they needed 3.3 months of income abroad simply to recover what they had spent to secure the job. For those workers, the first months of employment do not necessarily translate into immediate financial progress. A significant part of their early earnings is effectively committed before departure, reducing the income available for household expenses, savings and other priorities.

The survey complicates the familiar assumption that overseas work automatically delivers rapid economic relief. Migration may still improve household incomes over time, but high recruitment costs delay those benefits and transfer a large share of the risk onto workers and their families.

Women Carry an Even Heavier Burden

The burden is not evenly distributed. Women required around four and a half months of destination-country earnings to recover recruitment costs, compared with the overall average of 3.3 months. The difference could reflect variations in recruitment expenses, wages, occupations, industries or destination countries. What the data clearly establish, however, is that women begin overseas employment with a heavier cost burden relative to what they earn.

Recruitment costs are not only an upfront expense; they can shape a worker's choices after arrival. A worker who must recover several months of costs may have less financial freedom to leave an unsuitable job, change employers or return home early. Excessive fees can therefore deepen dependency on recruiters and employers, particularly during the initial months of employment.

The survey does not show that every worker who paid recruitment fees entered debt or suffered exploitation, but it demonstrates the conditions that can increase vulnerability: high upfront payments, delayed financial returns and limited room to absorb a failed placement or unexpected employment problem.

The gender gap should now become a key test of future policy. Reducing average costs will not be enough if women continue to sacrifice a larger share of their earnings to access employment abroad.

Informal Brokers Expose the Weakest Link

The highest recruitment fees were paid by workers who used unregistered brokers, placing informal intermediaries at the centre of Nepal's migration-cost problem. The finding highlights the limits of regulation focused only on formally registered recruitment agencies. Even where rules exist, workers may still rely on local brokers, personal contacts or intermediaries who operate outside easily monitored systems.

For prospective migrants, informal channels may appear more accessible, especially when brokers offer assistance with job searches, documentation or travel arrangements. However, limited transparency can make it harder for workers to know which payments are authorised, whether a job offer is legitimate or where to seek redress if conditions change.

The survey also found that costs and earnings varied according to destination, industry and occupation. Workers in higher-skilled roles and the services sector generally earned more than those employed in agriculture, manufacturing and lower-skilled occupations. This reinforces the economic value of skills, but it also reveals a two-sided challenge. Nepal must reduce the price workers pay to enter the migration system while improving their access to jobs that generate stronger returns.

A worker placed in a low-paid occupation after paying high recruitment fees faces a much longer and more precarious road to recovering those costs. On the other hand, workers with stronger skills and higher earnings may absorb recruitment expenses more quickly, even if the upfront charge remains significant.

The result is a migration system in which financial risk is shaped not only by how much workers pay, but also by the quality of the jobs they obtain. Fair recruitment and skills development are therefore connected policy priorities rather than separate agendas.

The Real Test Is Whether Costs Fall

The report calls for stronger enforcement of recruitment regulations, faster implementation of fair recruitment practices and greater transparency across migration corridors. It also recommends better access to information and grievance mechanisms, closer cooperation with destination countries and regular monitoring through Nepal's national statistical system.

The importance of the report lies partly in the benchmark it creates. Until now, Nepal lacked a nationally representative measure against which future progress could be assessed. Policymakers can now track whether recruitment costs decline, whether the burden on women narrows and whether fewer workers rely on unregistered brokers.

However, measurement alone will not alter the economics of migration. The harder task is turning national data into enforceable protections that reach workers before they sign contracts, hand over money or commit to a particular recruitment route. It will require more than tighter rules on paper. Workers need clear information on legitimate charges, reliable ways to verify recruiters and accessible mechanisms for reporting violations. Enforcement must also reach informal intermediaries rather than stopping at the offices of registered agencies.

Cooperation with destination countries will be equally important. Recruitment costs may be paid in Nepal, but the wages, contracts and employment conditions that determine whether workers recover those costs are shaped across borders.