India's Job Paradox

India's young are more educated than ever. So why are so many jobless?

India's youth story is a study in contradictions - of abundance and scarcity, promise and drift.

As the British economist Joan Robinson once quipped, whatever "you can rightly say about India, the opposite is also true".

Few studies illustrate that paradox more crisply than the latest State of Working India report by Azim Premji University.

Start with the headline number: 367 million young people between the ages of 15 and 29 - the largest youth population in the world, and making up a third of India's working-age population.

Of them, 263 million are not in education and constitute the potential workforce.

It is an enviable demographic bulge, the kind that powered East Asia's economic miracles. Yet, beneath this statistical bounty lies more troubling arithmetic.

There is, at first glance, reason for optimism.

Over four decades, the country has transformed its educational landscape, the report finds.

Enrolment in high school and colleges has surged, broadly keeping pace with India's development levels. Gender gaps have narrowed. Caste barriers, though far from erased, have reduced.

Between 2007 and 2017, the share of students from the poorest households enrolled in higher education rose from 8% to 17%.

A far more educated and connected generation is entering the labour market. Young workers are moving out of agriculture faster than older cohorts over the long term, finding opportunities in manufacturing and services.

On paper, this looks like the making of a classic demographic dividend.

"Never before have so many young Indians been as educated and as connected," the report says.

The bad news: the transition from education to employment remains stubbornly broken.

Graduate unemployment in an increasingly challenging labour market is strikingly high. The last half decade has not generated salaried jobs in adequate numbers, the report finds.

Nearly 40% of graduates aged 15-25 - and 20% of those aged 25-29 - are jobless, far higher than among the less educated, the report finds. Only a small share secure stable, salaried jobs within a year.

Part of this reflects how labour markets evolve over a life cycle. As Rosa Abraham, economist and lead author of the report, told me: "When you're young, you wait - and report unemployment."

Track the same cohort over time and joblessness falls; by their late 20s, many are working, says Abraham.

Early joblessness, she argues, reflects an "aspiration-availability mismatch" combined with the ability to wait. Over time, "you mellow, build networks and take what you can", often in the private sector.

- Author: Soutik Biswas, BBC

Read more...