India’s youth growing and getting more educated: Report

India has made substantial progress in expanding access to higher education for youth in the last four decades, helping them move from agriculture to industry and services, and reduced gender and caste-based disparities, a report said.

However, the ‘State of Working India 2026’ report stated that the challenges remain and the extent to which the large, increasingly educated, and aspirational cohort is absorbed into the labour market will determine whether India’s demographic dividend translates into an economic dividend. India has made substantial progress in expanding access to higher education for its young (15- to 29-year-old) population, ensuring a movement out of agriculture into industry and services, and reduced gender and caste-based disparities, it stated.

“More young people today are educated, informed, and ambitious than ever before. These are real achievements of which we can be proud,” noted Indu Prasad, President, Azim Premji University in a statement. The report draws on official databases going back four decades to see how youth participation in education and employment has changed, how well this demographic dividend has been used and the challenges and opportunities that arise in integrating them into the workforce.

Rosa Abraham, lead author of the report and Associate Professor of Economics at Azim Premji University said, “The report traces the journey of a young worker — from education to job search and employment, and how this transition has evolved over the last 40 years.”

We hope the report will lay out some of the foundational work that will contribute to a better understanding of the challenges in this transition and enable coordinated policymaking.” The key findings of the report highlights that demographic dividend is nearing peak.

India’s working-age population share will begin declining after 2030. The pace of job creation in the coming decades is critical to ensure that the demographic dividend translates into an economic one, it stated.

Youth education levels have increased significantly over the four decades, especially among women. India’s tertiary enrolment rate (28 per cent) is comparable to countries with similar per capita incomes.

About the drop in male tertiary enrolment, it stated that the share of young men in education fell from 38 per cent in 2017 to 34 per cent in late 2024, with a large share citing the need to support household incomes as reason for their withdrawal.

It noted that college availability increased from 29 per lakh youth (2010) to 45 (2021), mainly driven by private institutions. However, regional disparities remain large. It pointed out that faculty growth has not matched rising student numbers. Against AICTE norms of 15-20 students per teacher, private colleges average 28 and public colleges 47.

Hiring and filling up vacancies remain crucial to ensure that learning outcomes are not compromised due to resource constraints, it suggested. The number of Industrial Training Institutes (ITIs) has grown by nearly tripled since the 2010s, largely due to private providers. But, it stated that institutional quality, especially among private ITIs, has fallen. Between 2007 and 2017, the share of students in tertiary education who belong to the poorest households increased from 8 per cent to 15 per cent, it noted.

Students from richer households are far more likely to pursue engineering and medicine, as the cost of these degrees often exceeds the annual per capita expenditure of poorer households, it pointed out.

Graduate unemployment among the 15 to 29-year-olds remains high — nearly 40 per cent among them, and 20 per cent among the 25 to 29-year-olds; and, only a small share secure stable salaried jobs within a year of graduation.

Graduates earn roughly twice as much as non-graduates at entry, and the earnings gap widens over their careers.

Entry-level salaries for young male graduates have slowed in growth since 2011, while gender gaps in graduate earnings have narrowed.

Young workers are leaving agriculture faster than older cohorts and moving into manufacturing and services. Young women are increasingly employed in IT, automobile manufacturing, and business services.

Younger cohorts are less concentrated in occupations traditionally linked to their caste or gender.

Youth migration helps balance regional disparities — poorer states and those with a younger population remain major labour sources, while richer states with a predominantly older population rely increasingly on migrant youth, the report stated.