A recent report released by Azim Premji University has raised concerns about the unemployment rate among graduates in India, especially those under the age of 25. The report, titled “STATE OF WORKING INDIA 2023: Social Identities and Labour Market Outcomes,” reveals that a staggering 42 percent of graduates under the age of 25 are currently unemployed.
The Unemployment Challenge Among Young Graduates in India
The report highlights a concerning trend in youth unemployment, particularly among those with higher education qualifications. It notes that while the overall unemployment rate has improved slightly post-Covid, it remains high for young graduates. Specifically, the report states, “Post-Covid, the unemployment rate is lower than it was pre-Covid, for all education levels. But it remains above 15% for graduates, and more worryingly, it touches a huge 42% for graduates under 25 years.”
Graduates Finding Employment, but Questions About Quality Remain
While the report suggests that unemployment rates drop significantly for graduates aged 35 and above, indicating that graduates eventually find employment, it raises questions about the quality and suitability of these jobs. It remains uncertain whether these jobs align with graduates’ skills, qualifications, and aspirations, or if they are taking up positions below their educational levels.
Rise in Female Self-Employment and Gender Norms
The report also sheds light on the increase in female self-employment since 2019, primarily driven by distress-led self-employment. Before the Covid pandemic, approximately 50 percent of women were self-employed, but this figure rose to 60 percent in the post-Covid period. However, the report notes that self-employment earnings for women remained at only 85 percent of pre-pandemic levels.
Additionally, the report highlights the significant influence of gender norms on women’s employment. It reveals that the presence of a mother-in-law in the household, who is not employed, reduces the likelihood of married women being employed. Conversely, if the mother-in-law is employed, daughters-in-law are more likely to be employed.
Caste Disparities in Employment
The report touches upon caste-related disparities in employment. It notes that Scheduled Caste (SC) workers’ representation in waste-related and leather-related work has declined over time. Despite their share in the overall workforce, SC and Scheduled Tribe (ST) owners are underrepresented in smaller organizations, while upper-caste overrepresentation increases with firm size.
Regular Wage and Salaried Employment Trends
The report highlights the evolving trends in regular wage and salaried employment in India. After a decline since the 1980s, the share of workers with regular wage or salaried work started increasing in 2004, with substantial growth seen between 2004 and 2017. However, the pace of regular wage job creation has slowed since 2019 due to economic growth challenges and the impact of the pandemic.
The Disconnect Between Economic Growth and Job Creation
The report emphasizes the need to address the weak connection between economic growth and job creation in India. It points out that non-farm GDP growth and non-farm employment growth have shown no correlation since the 1990s. While economic growth did translate into employment gains between 2004 and 2019, the pandemic interrupted this trend, leading to more distress employment.
