42% Indian graduates under 25 unemployed: Report

Amid economic recovery from the COVID-19 pandemic, unemployment among educated youth in India remained high in 2021-2022, according to a new report.

Though the unemployment rates managed to scale the troughs created by the pandemic, they were as high as 42.3 per cent for graduates under 25, noted the State of Working India 2023: Social Identities and Labour Market Outcomes report by Azim Premji University.

“Post-Covid unemployment rate is lower than it was pre-Covid, for all education levels. But it remains above 15 per cent for graduates and more worryingly it touches a huge 42 per cent for graduates under 25 years,” read the report released on September 20, 2023.

The number of unemployed graduates under 25 was double that of youth with just higher secondary education in the same age category, the document pointed out.

While 42.3 per cent of graduates under 25 were unemployed in 2021-2022, the unemployment rate was at 21.4 per cent for youth who completed higher secondary education.

The report also raised concerns over the nature of jobs unemployed graduates eventually end up in. The unemployment rate falls from over 40 per cent for educated youth under 25 years of age to less than five per cent for graduates who are 35 years and above, it added.

“This indicates that eventually graduates do find jobs, but the key questions are, what is the nature of jobs they find and do these match their skills and aspirations?”

The document was compiled using the findings from official datasets such as the National Statistical Office’s Employment-Unemployment Surveys, the Periodic Labour Force Surveys, the National Family Health Surveys, the Annual Survey of Industries, and the Economic and Population Censuses.

The country’s economy has scaled heights since the 1980s, driving millions of workers away from agriculture. While the proportion of salaried workers increased over these years, the number of casual workers has decreased, it pointed out.

Jobs in construction and informal services have increased, but manufacturing has not helped significantly to contribute to the economy.

The Workforce Participation Ratio (WPR) is rising after witnessing a decline for years. The ratio, which has been stagnant since 2004, has increased but may not be for the right reasons, it noted.

“Female employment rates have risen since 2019 due to a distress-led increase in self-employment. Before Covid, 50 per per cent of women were self-employed. After Covid, this rose to 60 per cent.”

It finds that earnings from self-employment have dropped in real terms over the period. Post-pandemic lockdown, the self-employment rates were about 85 per cent compared with the rates in the April-June 2019 quarter.

The overall self-employment has therefore reduced in actual terms and the increase in self-employment is a result of economic distress, the report found.

Between 2004 and 2017, about three million salaried jobs were generated yearly and it peaked between 2017 and 2019. However, the increase in job creation in regular wages has dropped due to the COVID-19 pandemic and economic slowdown.

The report also observed that gender norms continue to remain significant in women’s employment.

“As husband’s income rises, women are less likely to work. In urban areas, after the husband’s income crosses Rs 40,000 per month, the chance of the wife working increases again (i.e. there is a U-shaped relationship).”

Strong intergenerational reasons also influence gender norms. Compared to households without mothers-in-law, married women living in households with unemployed mothers-in-law are 20 per cent (rural) to 30 per cent (urban) less likely to be employed.

“However, if the mother-in-law is employed herself, daughters-in-law are 50 per cent (rural) to 70 per cent (urban) more likely to be employed,” the report mentioned. 

Owners from the Scheduled Castes (SC) and Scheduled Tribes (ST) categories were under-represented compared to their contribution to the overall workforce and firms owned by the SC and ST communities barely had more than 20 workers.

On the contrary, those from general category saw an increase in representation corresponding to firm size.

Moreover, the report analysed that women SC and ST workers earn about 54 per cent of what general category women draw in salaried work.

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