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Economy 27-Mar, 2024

Striving Amidst Struggle: India's Youth Employment Crisis

By: Damini Mehta

Striving Amidst Struggle: India's Youth Employment Crisis

Source: Getty Images

The youth in India are facing a double whammy of slow growth in meaningful and quality jobs and an education sector that is hardly making them ready for the job market.

On the one hand, India is counted amongst the fastest growing countries in the world. On the other hand, India’s youth account for more than 80% of the unemployed workforce. According to a report published by the International Labour Organisation (ILO) and the Institute of Human Development (IHD), between the year 2000 and 2018, the Unemployment Rate (UR) showed a long-term deterioration. The employment scenario in India saw some improvement after 2019 but a large majority of the educated youth of the country have faced difficulty in getting meaningful employment commensurate with their qualification levels. As an example, the labor force participation rate (LFPR) among youths declined from 54% in 2000 to 42% in 2022. 

Clearly, better qualification has not helped gain better employment opportunities as 65% of youngsters who were unemployed in 2022 had a secondary or higher education. This number nearly doubled from 35.2% in the year 2000. Overall, youth employment and underemployment increased between 2000 and 2018 but declined again during the pandemic years. Notably, during the same period, educated youth continued to face much higher levels of unemployment, as per the report. 

The report highlights another important facet about the job market in India. In Spite of the continued push for organized employment and formalization of jobs as well as job providers, 90% of the workers in India still remain engaged in the informal sector leaving a very small percentage of people covered with social security measures. This situation is further worsened by an increase in contractual employment over the last few years essentially meaning that a very small percentage of those employed have long-term contractual job-security.

Amidst this backdrop of soaring aspirations and dwindling opportunities, the report delves into the nuanced dynamics of India's labour market. Shedding light on the skill readiness of youth in India, the report noted that more than two thirds of the youth in India lack the skills to deliver for the jobs. 90% of the youth are unable to put a mathematical formula into a spreadsheet whereas 75% can’t send emails with attachments. 60% of the youth fail to copy and paste files thereby lacking the most basic skills needed in this digital age. 

The nature of job creation in India has been skewed when it comes to making a shift from primary to tertiary sector. Prior to 2018, growth in non-farm sector jobs was higher than the growth in farm sector jobs but the employment generation capacity of the former lacks the ability to absorb agricultural jobs in a manner that supports the burgeoning aspirations of youth in India.

Furthermore, the report notes that the hitherto disadvantaged sections of the society such as women, Scheduled Castes and Scheduled Tribes continue to face discrimination in the job market. The report found that while Scheduled Castes and Scheduled Tribes have been able to find more jobs, they are primarily engaged in low-paid temporary casual wage work and informal employment. The report notes that improvement in educational attainment among disadvantaged groups has not helped reduce hierarchy within social groups in a major way. The gender gap in unemployment is a consistent feature of the job market in India. Compared to a LFPR of young men at 61.2% in 2022, LFPR of young women in the same year was three times lower at 21.7%. 

The reports points to a double whammy for the country where on the one hand the youth are ill prepared for the jobs on the market and on the other, there has been a decline in job creation across sectors in India. The report sheds light on the intricate web of challenges faced by the country's burgeoning young workforce. 

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