December - 2023
SEPTEMBER - 2023
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India Employment Report 2024: Youth employment, education and skills
Released by:
Institute for Human Development and International Labour Organisation
About Report:
• 3rd in series
• Examines challenge of youth employment in context of emerging economic, labour market,
educational and skills scenarios in India and changes witnessed over past 2 decades.
• Report highlights recent trends in Indian labour market, which indicate improvements in
some outcomes along with persisting and new challenges, including those generated by
COVID-19 pandemic.
• Primarily based on analysis of data from National Sample Surveys and Periodic Labour
Force Surveys between 2000 and 2022.
o Other sources of data include the Annual Survey of Industries, the National Account
Statistics and the Reserve Bank of India-KLEMS database.
Key Findings:
• Recent years have seen paradoxical shifts in key labour market indicators, reflecting a
blend of improvements and setbacks.
o While Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and
Unemployment Rate (UR) showed a long-term deterioration between 2000 and
2018 but witnessed an improvement after 2019.
o Improvement coincides with periods of economic distress, both pre- and post-
COVID-19 with exception of 2 peak COVID-19 quarters.
• Female labour force participation rate (LFPR) in India remains among world’s lowest.
• Female LFPR declined by 14.4% points (compared to 8.1% points for males) between
2000 and 2019.
o Trend reversed thereafter, with female LFPR rising by 8.3% points (compared to
1.7% points for male LFPR) between 2019 and 2022.
• There is a considerable gender gap — women’s LFPR (32.8%) in 2022 was 2.3 times lower
than men’s (77.2%).
• India’s low LFPR is largely attributed to low female LFPR, which was much lower than world
average of 47.3% in 2022, but higher than South Asian average of 24.8%.
• After a notable decline in previous years, female labour market participation rate displayed
a swifter upward trajectory from 2019 onwards, particularly in rural areas.
• Unemployment challenge among young women, especially those who are highly
educated, is enormous.
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• Basic long-term feature of employment situation in country continued to be insufficient
growth of non-farm sectors and ability of these sectors to absorb workers from agriculture.
o notwithstanding fact that non-farm employment grew at a higher rate than farm
employment over different periods prior to 2018.
• There has been a reversal of slow transition towards non-farm employment after 2018-19.
• Share of agriculture in total employment fell to around 42% in 2019 from 60% in 2000.
o This shift was largely absorbed by construction and services, share of which in total
employment increased to 32% in 2019 from 23% in 2000.
• Share of manufacturing in employment has remained almost stagnant at 12-14%.
• Since 2018-19, this slow transition has stagnated or reversed with the rise in the share of
agricultural employment.
• Almost 82% of workforce is engaged in informal sector, and nearly 90% is informally
employed
• Concerns flagged about poor employment conditions: women largely account for increase
in self-employment and unpaid family work; youth employment is of poorer quality than
employment for adults; wages and earnings are stagnant or declining.
• There are widespread livelihood insecurities, with only a small percentage being covered
with social protection measures, precisely in non-agriculture, organised sector.
• There has been a rise in contractualisation, with only a small percentage of regular
workers covered by long-term contracts.
• Informal employment has risen — around half jobs in formal sector are of an informal nature.
• Increase in employment post-2019 was largely driven by self-employed workers, with a
significant portion comprised of unpaid family workers, predominantly women.
o Self-employment remains primary source of employment — 55.8% in 2022.
o Casual and regular employment accounted for 22.7% and 21.5% respectively.
▪ Casual employment consistently declined to 22.7% in 2022 from 33.3% in
2000.
• Share of regular employment, which saw a steady rise post-2000, witnessed a decline
after 2018.
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• Share of self-employment remained almost stable around 52% between 2000 and 2019,
while regular employment increased by almost 10 percentage points, to 23.8% from 14.2%.
• While India’s large young workforce is a demographic dividend, they don’t appear to have
skills to deliver.
o Window for India to leverage its sizeable cohort of youth for wider socio-economic
gains is fast closing, with share of young people forecast to decline to 23% by 2036,
from 27% in 2021.
• There has been a rise in youth employment, but quality of work remains a concern,
especially for qualified young workers.
• Youth employment and underemployment increased between 2000 and 2019 but declined
during pandemic years.
• Unemployment among youths, especially those with secondary-level or higher education,
has intensified over time.
• In 2022, share of unemployed youths in total unemployed population was 82.9%.
o Approximately 7-8 million young people being added to labour force in India each
year.
• Share of youngsters with secondary or higher education in total unemployed youth has
almost doubled from 35.2% in 2000 to 65.7% in 2022.
• Unemployment rate among youths was 6 times greater for those who had completed
secondary education or higher (18.4%) and 9 times higher for graduates (29.1%) than for
persons who could not read or write (3.4%) in 2022.
o This was higher among educated young women (21.4%) than men (17.5%),
especially among female graduates (34.5%), compared to men (26.4%).
• Unemployment rate among educated youths grew to 30.8% in 2019 from 23.9% in 2000
but fell to 18.4% in 2022.
• Lack of quality employment opportunities is reflected in high level of joblessness among
young people, especially among those who have achieved higher education.
o Many highly educated young people are unwilling to take on low-paying, insecure
jobs that are currently available and would rather wait in hopes of securing better
employment in future.
• Dropout rates after secondary education remain high, particularly in poorer states and
among marginalised groups. Despite rising enrolment in higher education, quality concerns
persist, with significant learning deficits observed across school and higher education levels.
• Average earnings of regular salaried workers are considerably higher than that of self-
employed and casual workers.
o There is also a gender gap in average monthly earnings.
• Wages have largely remained stagnant or declined, with real wages for regular workers
and self-employed individuals showing a negative trend after 2019.
o As much as 62% of unskilled casual agriculture workers and 70% of such workers in
construction sector at all-India level did not receive prescribed daily minimum wages
in 2022.
• A substantial portion of unskilled casual workers did not receive mandated minimum wages
in 2022.
• Throwing light on growing social inequalities, report said despite affirmative action and
targeted policies, Scheduled Castes (SCs) and Scheduled Tribes (STs) still lag in terms of
access to better jobs.
o SCs and STs have greater participation in work due to economic necessity but
engaged more in low-paid temporary casual wage work and informal employment.
o Despite improvement in educational attainment among all groups, hierarchy within
social groups persists.
• Urbanisation and migration rates are forecasted to increase, with projections
suggesting a migration rate of around 40 percent by 2030 and a substantial urban
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population growth driven by migration, particularly from eastern and central regions
to southern, western, and northern regions.
Employment Condition Index:
• Based on 7 labour market outcome indicators:
(i) percentage of workers employed in regular formal work;
(ii) percentage of casual labourers;
(iii) percentage of self-employed workers below the poverty line; (iv) work
participation rate;
(v) average monthly earnings of casual labourers;
(vi) unemployment rate of secondary and above educated youth;
(vii) youth not in employment and education or training.
• Improved between 2004-05 and 2021-22.
o But some states — Bihar, Odisha, Jharkhand, and UP — have remained at
bottom throughout this period, while some others — Delhi, Himachal Pradesh,
Telangana, Uttarakhand, and Gujarat — have stayed at top.
• Between 2005 and 2022, there was a steady rise in values, denoting better
employment conditions.
o However, this trend was interrupted and even reversed after 2019,
coinciding with onset of COVID-19 pandemic, highlighting persistent
challenges in employment conditions.
Recommendations:
• There are 5 key policy areas for further action: promoting job creation; improving
employment quality; addressing labour market inequalities; strengthening skills and
active labour market policies; and bridging the knowledge deficits on labour market
patterns and youth employment.
• The rise of artificial intelligence (AI) could have an impact on employment, the report
said, noting that the outsourcing industry in India could be disrupted because some
back-office tasks would be taken over by AI.
• Investment and regulations are required in the emerging care and digital economies, which
could be an important source of productive employment. The lack of job security, irregular
wages, and uncertain employment status for workers pose significant challenges for gig or
platform work.
• Economic policies are required to boost productive non-farm employment, especially in the
manufacturing sector, with India likely to add 7-8 million youths annually to the labour force
during the next decade.
• More support needs to be provided to micro, small and medium-sized enterprises, especially
by providing tools such as digitalisation and AI and a cluster-based approach to
manufacturing.
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