42% of Indian Graduates Under 25 Are Unemployed: Shocking Report
The number of unemployed graduates under 25 was double that of youth with only higher secondary education in the same age group
Unemployment among educated youth in India remained high in 2021-2022 amid the economic recovery from the Covid-19 pandemic, according to a new report.
Though the unemployment rate managed to overcome the troughs created by the pandemic, it was up to 42.3 per cent for graduates under 25, according to the State of Working India 2023: Social Identities and Labour Market Outcomes report by Azim Premji University.
“The post-Covid unemployment rate for all education levels is lower than pre-Covid. But for graduates it remains above 15 per cent and, more worryingly, for graduates below the age of 25, it reaches 42 per cent,” the report released on September 20, 2023, said.
The number of unemployed graduates below the age of 25 was double that of youth with only higher secondary education in the same age group, the document pointed out.
42.3 per cent of graduates below the age of 25 were unemployed in 2021-2022, while the unemployment rate for youth who completed higher secondary education was 21.4 per cent.
The report also raised concerns over the nature of jobs that unemployed graduates eventually find. It said the unemployment rate has fallen from 40 per cent for educated youth below the age of 25 to less than five per cent for graduates aged 35 and above.
“This shows that graduates eventually find jobs, but the key question is what is the nature of the jobs they get and do these match their skills and aspirations?” The document was compiled using findings from official datasets such as the National Statistical Office’s employment-unemployment survey, Periodic Labour Force Survey, National Family Health Survey, Annual Survey of Industries and Economic and Population Census.
The country’s economy has reached new heights since the 1980s, drawing millions of workers away from agriculture. It pointed out that the proportion of salaried workers has increased over these years, but the number of casual workers has declined.
Jobs in construction and informal services have increased, but manufacturing has not significantly helped contribute to the economy.
The workforce participation ratio (WPR) is rising after seeing a decline for years. The ratio, which was stagnant since 2004, has increased, but may not be for the right reasons, it pointed out.
“The female employment rate has increased since 2019 due to a crisis-driven increase in self-employment. Before Covid, 50 per cent of women were self-employed. Post-Covid, this rose to 60 per cent.
It found that income from self-employment declined in real terms during this period. Self-employment rates during the post-pandemic lockdown were around 85 per cent compared to rates in the April-June 2019 quarter.
Overall self-employment has therefore declined in real terms and the rise in self-employment is a result of the economic crisis, the report found.
Between 2004 and 2017, around three million salaried jobs were created annually and this peaked between 2017 and 2019. However, the growth in regular-salary job creation has slowed due to the Covid-19 pandemic and the economic slowdown.
The report also found that gender norms remain important in women’s employment.
“As the husband’s income rises, women are less likely to work. In urban areas, once the husband’s income exceeds Rs 40,000 per month, the wife’s probability of working again increases (i.e. there is a U-shaped relationship).”
Strong inter-generational factors also influence gender norms. Married women living in households with unemployed mother-in-laws are 20 per cent (rural) to 30 per cent (urban) less likely to be in employment, compared to households with no mother-in-law.
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“However, if the mother-in-law is herself employed, daughters-in-law are 50 per cent (rural) to 70 per cent (urban) more likely to be in employment,” the report noted.
Owners from the Scheduled Caste (SC) and Scheduled Tribe (ST) categories were underrepresented compared to their contribution to the overall workforce and firms owned by SC and ST communities hardly had more than 20 employees.
In contrast, those from the general category saw an increase in representation commensurate with firm size.
Further, the report analyses that the income of Scheduled Caste and Scheduled Tribe women workers in salaried work is about 54 per cent of that of general category women.
