Balwant Singh Mehta

Young people worldwide are increasingly finding it difficult to get a stable job, especially due to limited experience and resources to compete effectively in the job market.

The India Employment Report, 2024, jointly published by the Institute for Human Development (IHD) and the International Labour Organisation (ILO), has highlighted this issue for India. The report indicates an overall improvement in the labour market in recent years, with a rise in adult (15+ years) employment rates from 46.8 per cent in 2018 to 56 per cent in 2023, and a decrease in unemployment rates from 6 per cent to 3.2 per cent, with youth unemployment rate decreased from 17.8 per cent to 10 per cent.

However, educated youth face disproportionately high unemployment rates, at 16 per cent for secondary and above and 28.4 per cent for graduates and above. Despite national improvements, significant regional and State-level disparities in youth unemployment exist, which are masked in the national average and require detailed discussions and clarity.

India’s working-age population (15-59 years) comprises 64 per cent of the total with, 8-9 million new individuals joining annually. Despite a yearly decrease in the youth (15-29 years) of one million, it still represents 40 per cent of India’s working-age population, the highest globally.

The IHD-ILO report stresses India’s “final window of opportunity” to harness its “demographic dividend” provided labour supply and employment are sustained with high workforce productivity. The challenge lies in not only creating more jobs but also ensuring decent employment across States for their growing labour force.

State-level variance

Indeed, significant differences exist in the youth population across States. Uttar Pradesh (18.6 per cent) and Bihar (9.5 per cent) alone constitute over one-fourth (28.1 per cent) of the total youth population in the country, projected to reach 29.8 per cent by 2036.

These States, along with Maharashtra (8.3 per cent), Madhya Pradesh (7 per cent), and Rajasthan (6.4 per cent), are anticipated to represent over half (52 per cent) of the youth population.

So, the less developed States, especially in eastern and central region like Bihar, Chhattisgarh, Jharkhand, and Madhya Pradesh, expect an increase in youth population, while developed States particularly in southern region like Kerala, Tamil Nadu, Telangana, Andhra Pradesh, and Karnataka anticipate a significant decline.

In recent decades, there has been a decline in both the crude birth rate and mortality rates among the elderly in India. The total fertility rate (TFR) has also dropped below the replacement rate of 2.1 children per woman in major States, except Uttar Pradesh, Jharkhand, and Bihar.

Consequently, India’s youth population is decreasing and is projected to decline further, indicating the likely closure of the “youth bulge” advantage. As discussed above, only few less developed States in eastern and central India are expected to sustain a “youth bulge”, contributing significantly to the working-age population.

Conversely, developed States, especially in the south, will likely see a smaller youth population share and an increase in the ageing population.

The disparities in youth population across major States are also reflected in the Youth Employment Condition Index (YECI), which evaluates four key supply and demand labour market indicators as given in the IHD-ILO report.

States with higher YECI performance compared to the national average include Tamil Nadu, Himachal Pradesh, Kerala, Delhi, Maharashtra, Karnataka, Telangana, Gujarat, Haryana, Punjab, Uttarakhand, Andhra Pradesh, and Chhattisgarh. These States exhibit high per capita incomes, a substantial number of highly educated youths, and a relatively higher proportion of youth engaged in quality regular formal jobs (Fig 1).

Conversely, States with lower YECI performance such as Assam, Bihar, Odisha, Rajasthan, Jharkhand, Pradesh, Madhya Pradesh, West Bengal, and Jammu & Kashmir are characterized by low per capita incomes, a larger share of youth in the population with lower education levels, higher unemployment rates, limited regular formal employment, and a significant number of youths are not in employment, education, or training (NEET) status (Fig 2).

Despite high YECI performance, developed States like Kerala, Andhra Pradesh, Telangana, Tamil Nadu, Punjab, and Haryana still grapple with challenges of educated unemployment and NEET status among youth.

While these States have a sizable population of highly educated young people, not all secure local suitable job opportunities. Additionally, they face a shortage of low and unskilled workers, and demand for such workers expected to increase further in the future.

Conversely, States with low YECI performance struggle to generate enough jobs for increasing young labour force, leading to out-migration. This diminishes the economic contribution and demographic advantage of such young individuals in their home States.

This analysis highlights the disparity in youth employment and unemployment situation across States, often hidden by national averages. Thus, there’s a pressing need for customized regional or state-level policies to tackle youth unemployment issues.

States with low YECI scores should prioritise local job opportunities for their growing youth population, while those with high YECI scores should aim for quality job creation that meets youths’ aspirations.

The Central and State Governments have initiated several schemes to increase youth employment, but most of these schemes focus more on skill development rather than creating suitable jobs.

While enhancing skills is important, it alone won’t solve unemployment problem without creating adequate and suitable jobs. The policies should assist employers in creating suitable jobs to achieve Sustainable Development Goal 8, ensuring access to decent employment for all and reducing youth unemployment rates.

The writer is Professor at IHD, Delhi, and co-author of India Employment Report, 2024. Views expressed are personal.