The youth unemployment conundrum
What has been the track record of the United Progressive Alliance (UPA) government in tackling unemployment, particularly among educated youth? The National Sample Survey Office (NSSO) numbers for 2011-12 show that the unemployment rates for young male graduates in the 15-29 years age group in urban India was a very high 16.3%. That means almost one in every six of these young people was unemployed in that year. The number is even higher for young urban female graduates, with almost one fourth of them unemployed, as seen from the chart. And if you think that is high, a glance at Chart 1 will show that jobs for graduates, both men and women, in rural India are even harder to find. And since the rate of growth of the economy has slowed even further since 2011-12, it can safely be said that unemployment among young educated people is even higher now than what it was in 2011-12.
The numbers also show that the more educated you are in India, the less the chances of finding a job. In sharp contrast to the high unemployment rates for young graduates, the unemployment rate among illiterate men in urban areas in the 15-29 years age bracket was a low 2.5% in 2011-12. What could explain this rather surprising trend? It’s probably because unskilled jobs are easier to find and also because at the lowest social level which supplies unskilled workers, remaining unemployed is a death sentence and is not an option. Moreover, much of the employment creation in recent years has been in the construction industry, for which a high level of education is not essential.
Another feature brought out by the NSSO survey is that the unemployment rate among educated young people, in the 15-29 years age group, is higher than for the working population as a whole. To take an example, the unemployment rate for all persons holding a graduate or higher degree in urban India was 5.3% in 2011-12. That suggests new entrants into the labour force, particularly educated young people, find it more difficult to get jobs, which is rather obvious.
Is the high unemployment rate among graduates and other educated youth the reason for the seething unrest among the young that is such a hot topic of discussion these days? It would be very tempting to think so. It would also be easy to assume then that since this group comprises first time voters, their anger at their lack of job opportunities will be a big factor in the coming elections.
Unfortunately, the numbers don’t lend unalloyed support to that conclusion. Chart 2 shows that unemployment among young male urban graduates was lower in 2009-10, when the economy was growing very strongly. But unemployment among young women graduates was higher in 2009-10 than in 2011-12. What’s more, unemployment among young graduates, both male and female, was much higher in 2004-05, compared with 2011-12. Of course, since then, it is also very likely that with growth slowing, unemployment among the educated youth has become worse.
An important question is: why is unemployment among graduates so high, even during a year of good economic growth such as 2009-10? The answer probably is that many of them are unemployable, as many employers have repeatedly said. It’s a telling comment on the state of our education system.
What of unemployment among young people in general, without bothering about their educational qualifications? Chart 3 is a comparison in unemployment levels among persons aged between 15 and 29 years in 2004-05 and 2011-12. The CDS (current daily status) approach, which is the most inclusive method of estimating employment, has been used for the comparison. Note that unemployment has come down for all categories—rural and urban, male and female.
Chart 4 gives the broad unemployment data for the working population as a whole, again using the CDS method. Here, too, it is clear that unemployment has come down in all categories. However, one important caveat is that the credit for this should go to the state government rather than the centre. For example, unemployment among urban males in Gujarat, at a mere 1.4%, was the lowest among the major states. In contrast, Chhattisgarh had the highest unemployment rate among urban males, at 9.3%. For urban females, too, the lowest unemployment was in Gujarat, at 2.4%, while Bihar was the highest at 27.1%. Gujarat also had the lowest unemployment rate for rural males.