The issue of unemployed youth has become a focal point in political discourse. The interpretation of unemployment rates and its politicisation are exacerbating the situation

Youth unemployment is a global concern, carrying significant economic, social and political implications for both developed and developing nations. It’s a key focus of the Sustainable Development Goals (SDG) for 2030, adopted by countries across the world, including India. Recently, the issue gained significant attention in India following the release of the India Employment Report (IER) 2024 by the International Labour Organisation (ILO) and the Institute for Human Development (IHD), New Delhi on March 26, 2024. The report emphasised India’s demographic advantage due to its large youth population, which is expected to remain for at least another decade. 

However, it also highlighted a pressing challenge: the high and rising unemployment rate among youth, especially those with higher educational qualifications, and enter the labour force each year. This issue has grabbed headlines in both national and international media and has become a prominent topic in political discussions and debates. However, the misinterpretation of youth unemployment rates and politicisation of the issue by various commentators and political parties are exacerbating the situation.

This article aims to provide a closer analysis and interpretation of this issue. A large proportion in total unemployed population consists of young people, but they make up only a small percentage of overall youth population: The youths made up 83 per cent of India’s unemployed population, whereas out of around 361 million total youths and 664 million adults (30+ years) in India, only 5 per cent youth and negligible 0.6 per cent adults were unemployed in 2023.

The main point here is that while it may seem like there are a lot of young people in the labour force (both employed and unemployed) who don’t have jobs, when you compare it to the total number of youth in the country, it’s actually a small percentage. Therefore, when considering unemployment, it becomes clear that this is primarily a youth issue, who often enter  in the labour market for the first time and faced greater challenge than the experienced adults. 

The surplus youth labour force has concealed a significant increase in job opportunities over the recent decade compared to the previous one:  A good number of jobs were created for young people from 2012 to 2023 (the recent decade) than from 2000 to 2012(the previous decade). However, this positive trend was overshadowed by a significant increase in the number of young people entering the labour force in the recent decade. This surge in the youth labour force resulted in a rise in their unemployment figures and rate. Specifically, nearly twelve times more jobs were created for young individuals in the recent decade (7.9 million) compared to the previous decade (0.7 million). However, the increase in the youth labour force was much higher in the recent decade (16.1 million), compared to the previous decade (1.6 million). Consequently, the number of unemployed young people increased more than eight times in recent decade (8.2 million) compared to the earlier decade (0.9 million), leading to an increase in the youth unemployment rate from 6 per cent in 2012 to 10 per cent in 2023.

The significant increase in the number of young people with graduate and higher educational qualifications over the past decades is a good thing. However, this has also led to a rise in their unemployment rate, despite there being more jobs generation. This could be because of skill mismatch or rise in their level of expectations and aspirations: To explain further, let’s look at trends. In 2000, only 5 per cent of young people had graduate or higher qualifications. By 2023, this had increased to 20 per cent. That’s a big jump!

During the previous decade, 7.6 million of these highly qualified young people entered the job market. In the recent decade, that number jumped to 24.6 million. But here’s the catch: only 6.5 million of them found jobs in the first period, and 17.5 million found jobs in the second period. This increase in the number of jobs available for highly qualified young people should be a good thing, right?

However, the number of unemployed graduates also rose, from 1.2 million to 7.2 million. Also, the unemployment rate among them also increased from 19.9 per cent in 2012 to 28 per cent in 2023. So, even though more jobs are being created for highly qualified young people in recent years, their unemployment rate is still going up. This could be because there are too many highly qualified young people for the available lower number of jobs, their skills don’t match what employers need, or there are jobs being created, they often don’t meet their expectations and aspirations.

The ILO-IHD report also highlighted “Educated youth, whether male or female, want stable white-collar jobs. The economy is generating jobs but not enough secured well paid public sector or white-collar jobs as aspired by highly educated youths. In addition, the technological advancement rapidly affected the demand for skill and certain types of employment.”

The labour market surveys in India may not be adequately covering the information of youth involved in emerging new types of jobs, which may lead to inaccuracies in employment and unemployment data. This is a problem because emerging digital technology is changing the job market, making it more complicated. For example, there are now jobs in the gig economy and on social media platforms like YouTube and Instagram. These jobs are especially popular among young people. However, there haven’t been any studies to figure out how many of these jobs there are, especially since they’ve become more common after the COVID-19 pandemic.

The national labour force surveys also don’t include these new types of jobs because they haven’t been defined properly. As a result, the national labour statistics might not count all the jobs that exist, which could make it seem like there are more unemployed young people than there really are.

During the report’s release, Chief Economic Adviser V Anantha Nageswaran mentioned that it’s not always necessary for the Government to intervene in every social or economic issue. He emphasised that businesses should take the lead in hiring more people. He stated, “We need to change our mindset. In usual circumstances, it’s businesses, especially those involved in making a profit, that should be doing the hiring.” He acknowledged various Government initiatives while also admitting, “There’s room for improvement, and I believe the Government is aware of that.”

From the above discussion, we can see that a significant number of job has been created for young people in recent decade. But there are still employment challenges for young people, especially those who have graduate and higher level of educational qualification because more of them are completing for available jobs. Other facators like technological changes, higher aspirations, and skill mismatches also contribute to this issue. In this context, it’s important to interpret sensitive data such as youth unemployment rate with caution and care. Doing so will benefit healthy discussions and debates and also assist both the national Government and other relevant stakeholders in devising appropriate policies for suitable job creation for youth.

(The writer is Professor at Institute for Human Development, Delhi and Co-Author of India Employment Report, 2024. The views expressed are personal)