In a stark revelation, a recent report published by Azim Premji University sheds light on the concerning state of unemployment among Indian graduates under the age of 25. The report underscores that despite India’s robust economic expansion, a staggering 42 percent of graduates in this age group find themselves without gainful employment, following the onset of the Covid-19 pandemic.
The study, aptly titled “STATE OF WORKING INDIA 2023: Social Identities and Labor Market Outcomes,” draws attention to a significant disparity between various education levels. The unemployment rate for graduates under 25 years of age stands at an alarming 42 percent, far surpassing that of higher secondary (21.4 percent), secondary (18.1 percent), and middle (15 percent) education levels.
It’s worth noting that even though the post-Covid era has seen a decrease in the unemployment rate across all education levels, the situation remains dire for young graduates, hovering above 15 percent. This report poses a critical question: What kind of employment opportunities are these graduates eventually securing, and do they align with their skills and aspirations?
The report delves into the evolving landscape of job creation in India. Historically, non-farm GDP growth and non-farm employment growth have exhibited an uncorrelated relationship since the 1990s. However, this paradigm shifted between 2004 and 2019, only to be disrupted by the pandemic, resulting in a surge in distress employment.
Encouragingly, the report indicates that as graduates age, their unemployment rate dwindles. Those above 35 years of age with a degree see their unemployment rate drop below 5 percent, suggesting that employment opportunities eventually manifest. Nevertheless, the crucial questions revolve around the quality of these jobs and their alignment with graduates’ skill sets and aspirations.
The report also spotlights the gender disparities in employment. Post-2019, female employment witnessed an increase due to a distress-led surge in self-employment. Remarkably, pre-pandemic, 50 percent of women were self-employed, but this figure surged to 60 percent in the post-Covid era. However, the earnings from self-employment two years after the 2020 lockdown remained only at 85 percent of pre-pandemic levels.
Furthermore, the report emphasizes the enduring significance of gender norms in women’s employment. In households where the mother-in-law is present but not employed, married women are 20 percent less likely to be employed in rural areas and 30 percent less likely in urban areas. Conversely, when the mother-in-law is employed, daughters-in-law are 50 percent more likely to be employed in rural areas and 70 percent more likely in urban areas.
The report also addresses caste-based segregation in employment. While Scheduled Caste (SC) workers have seen a decline in waste-related and leather-related work over time, these disparities have not been completely eliminated as of 2021-22. The representation of SC and ST (Scheduled Tribe) owners in the smallest firms remains disproportionately low, with better representation observed in larger firms employing over 20 workers.
In conclusion, the report highlights the pressing need for targeted policies and interventions to address the multifaceted challenges of unemployment in India, encompassing the youth, gender, and caste dimensions. Addressing these issues is pivotal for fostering inclusive and equitable economic growth.
