An increasing proportion of India’s youth are unemployed. A look at the World Development Indicators data of the World Bank shows that only one in three people in the 15-24 years was employed in 2014. That is a 13 percentage point drop from the 45% employment rate in 1991 when economic reforms were initiated.
To be sure, the population in the 15-24 age group has increased by 45.3% in India between 1990 and 2015, according to data from UN World Population Prospects. So, jobs for this segment have failed to keep pace with the rise in population. That said, the proportion of this age group in the overall population has marginally declined. It was 19% in 1990 and came down to 18.4% last year.
India’s youth employment is also far lower than the 41% global average.
China, a country which India likes to compare itself with, also has a youth employment rate of 51%. However, China has seen a far sharper fall in the proportion of people in the 15-24 age group over the years. In 2015, the figure was 13.4% compared to 21.8% in 1990.
To be sure, another reason for the fall in youth employment is that a greater proportion is seeking higher education. Data from the ministry of human resource development show that enrolment in higher education among 18-23 year olds has increased from 8.1% in 2001-02 to 21.1% in 2012-13.
Simply put, a lower percentage of India’s youth is now seeking jobs. National Sample Survey Office (NSSO) data show a sharp fall in the proportion of youth in both rural and urban areas that are in the labour force. This is especially so in the case of women, as chart 2 shows.
Now, the World Development Indicators report employment rate as the number of employed people in a particular age group divided by the total population in that age group.. However, if we only consider the set of people actively seeking work (i.e. the labour force), employment rate has fallen for the rural young.
For the urban young, things appear better, but job opportunities have not been commensurate with higher education levels, experts say, leading to lower employment.
“The young enter the job space with less experience and very specific expectations. So it takes them longer to find jobs. With declining job opportunities, the youth take up multiple informal jobs to make ends meet or fall out of labour force,” said Ravi Srivastava, a professor of economics at Jawaharlal Nehru University.
NSSO figures show at every level of education, the unemployment rate is higher among the 15-29 year old age groups as compared to the broader population as a whole.
While India still needs to tackle the issue of overall job opportunities, experts say it is this youth segment which poses a bigger concern. Protests for reservations in government jobs in states such as Haryana and Gujarat recently are testament to the fact that a growing percentage of the population is vying for a shrinking pie.
“Lower employment among youth can lead to social unrest and turmoil, besides contributing to lower productivity and loss to society. Formal jobs in the country are declining, and with rising education levels, there is an increasing claim for fewer jobs,” Srivastava added.
A report from the United Nations Development Programme (UNDP) released in April this year said that India faces a serious challenge of finding jobs for a growing population over the next 35 years. The report states that between 1991 and 2013, the size of the ‘working age’ population increased by 300 million, of which the Indian economy could employ only 140 million. The report said that by 2050, at least 280 million more people will enter the job market in India.