Higher education leads to higher unemployment rates in young educated Indians, ILO reports

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The International Labour Organisation (ILO) reveals data that indicates, in India, young individuals with higher education degrees are experiencing substantially higher unemployment rates than those without formal education. Specifically, graduates face a jobless rate of 29.1%, nearly nine times the 3.4% unemployment rate of their uneducated counterparts.

This trend underscores a growing issue within the Indian labour market, where unemployment is significantly more prevalent among the youth, particularly those with secondary education or higher. The ILO’s findings show that the unemployment rate for young people with at least secondary education is 18.4%, six times higher than those without education.

The data suggests a pronounced disconnect between the skills the education system provides and the job market demands. Renowned economists, including former central bank Governor Raghuram Rajan, have voiced concerns that the inadequacies in India’s education system could impede the country’s economic growth in the long term.

Despite a decrease in the overall share of young unemployed Indians aged 15 to 29, from 88.6% in 2000 to 82.9% in 2022, there has been an increase in the proportion of educated unemployed youths, rising from 54.2% to 65.7%. This shift highlights the challenges in generating high-quality jobs for the burgeoning educated youth in the non-farm sectors.

Women, in particular, are disproportionately affected by this trend, representing 76.7% of the educated unemployed youth, as opposed to 62.2% for men. India’s female labour force participation rate is among the lowest globally, at around 25%, though it saw some improvement during the pandemic due to a rise in subsistence employment.

The report also touches on the situation in urban and rural areas, indicating a widespread challenge across different geographies. Comparatively, China’s youth unemployment rate for individuals aged 16-24 was 15.3% in the early months of the year, significantly higher than the 5.3% rate for the urban population.

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