Using data from the Nepal Living Standards Survey (NLSS)-III-2010/11 this study examines the effect of unpaid care work on the capability of care providers to earn a living and to attain tertiary education. The conceptual model, motivated by the Capability Approach, delineates contemporaneous and compounding effects of undertaking unpaid care work on the caregiver and its wider intergenerational and societal effects. Using an instrumental variables approach, the empirical analysis identifies adverse gender-differentiated effects of time devoted to caregiving: While women and men experience commensurate declines in their weekly employment hours, likelihood of employment and tertiary education decreases for women only. The study is one of the few least developed-country studies that use time-use survey data to examine causal effects of unpaid work, and the first study for Nepal. It draws attention of policymakers to the adverse effects of care burden on individual well-being and its broader development outcomes in Nepal.