Catastrophic floods in Nepal have severely disrupted employment and livelihoods, with consequences extending well beyond the areas directly affected, according to a preliminary assessment released by the International Labour Organization (ILO).
On 26 August 2026, a flash flood swept down the Bhote Koshi-Trishuli corridor from the Nepal-China border resulting in major loss of life and economic damage.
The assessment estimates that around 21,400 employed people live within four kilometres of the mapped flood footprint. The destruction of homes, workplaces, roads, bridges and energy infrastructure has disrupted economic activity and workers' ability to reach jobs, markets and essential services.
It identifies tourism, agriculture, transport and micro and small enterprises as facing significant pressures. Workers such as guides, porters, hotel and restaurant workers, transport operators and agricultural workers may face reduced earnings, interrupted work and difficulties accessing customers, inputs and markets.
Nepal's high level of informal employment means that many workers have limited income and social protection buffers. Daily wage, casual and informal workers, own account workers and micro and home-based enterprises can therefore experience income losses quickly when economic activity is interrupted, even where jobs are not formally lost.
Damage to transport and electricity infrastructure is likely to amplify the initial shock, transmitting the effects of the flood from directly affected households and enterprises to the wider local and regional economy.
Disruption to the Nepal-China trade corridor could also affect enterprises and workers far beyond the flood-affected districts. The Rasuwa and Tatopani border crossings together accounted for around 22 per cent of Nepal's imports from China in 2025-26, while Rasuwa - where the flood severely damaged critical transport infrastructure - handled nearly half of Nepal's exports to China. Disruption to these trade flows could transmit employment and income effects across a range of activities. The extent of these effects will depend on the duration of the disruption, the availability and cost of alternative trade routes, and the ability of enterprises to adapt.
The assessment stresses that recovery and reconstruction can help protect livelihoods while creating decent employment. It calls for immediate income and enterprise support alongside employment-intensive reconstruction, job matching and skills development, occupational safety and health measures, stronger social protection and support for resilient enterprises.
"The employment consequences of this disaster will not stop at the edge of the flooded area. Damage to transport links, electricity infrastructure and trade routes can carry the shock through supply chains, markets and connected services, affecting workers and enterprises much farther away," said Numan Özcan, ILO Country Director for Nepal. "Recovery must therefore protect livelihoods as well as rebuild infrastructure and use reconstruction to create decent jobs and strengthen resilience."
About the assessment
Employment implications of the floods in Nepal: A preliminary rapid assessment examines the potential effects of the August 2026 floods on employment and livelihoods in and around affected areas, as well as wider impacts that could arise through damaged infrastructure, sectoral linkages and disruptions to cross border trade. Employment exposure estimates are indicative and should not be interpreted as estimates of actual job or income losses.
