INDIA’S YOUTH EMPLOYMENT PARADOX

1. Demographic Dividend
   • 7-8 million youth join the labour market annually.
   • Potential to fuel economic growth, innovation, and productivity.
2. Alarming Unemployment Trends
   • India’s youth constitute 83% of the unemployed workforce.
   • Share of educated unemployed youth has nearly doubled since 2000.

This paradox highlights the urgent need for targeted policies and interventions to harness the potential of India’s youthful population while addressing the pressing issue of youth unemployment.

CHALLENGES IN JOB CREATION

• Economic Growth vs. Job Creation
  • Despite robust economic growth (8.4% in Q4 2023), job creation lags behind.
  • Struggle to generate sufficient jobs for millions of young entrants to the labour market annually.
• Risk of Squandered Demographic Dividend
  • High unemployment rates pose a risk of wasting the demographic dividend in India and neighboring countries, as warned by the World Bank.
• Stagnating Employment Growth
  • Study by D Tripati Rao highlights stagnating employment growth, weak employment elasticity, and structural problems like low female labour force participation and rising unemployment with higher education levels.
• Historical Trends
  • Periods of significant output and employment growth (1987–88 to 2004–05) followed by “jobless growth” until recently, indicating structural challenges in job creation.

KEY FINDINGS FROM ILO INDIA EMPLOYMENT REPORT 2024

• Unemployment Disparity Based on Education:
  • Educated youth face higher unemployment rates compared to those with minimal education.
  • Graduates experience a staggering 29.1% joblessness rate, while it’s only 3.4% for illiterate individuals.
• Illustrative Job Application Discrepancies:
  • Instances like 93,000 applicants for 62 ‘peon’ posts, including PhD holders and postgraduates, highlight the mismatch between job requirements and applicants’ qualifications.
• Skills Gap and Digital Literacy Challenges:
  • Many Indian youth lack basic digital literacy skills, hindering their employment prospects.
  • Efforts are needed to bridge the digital divide and align skills training with industry needs.
• Gender Disparity in Labour Force Participation:
  • India’s female labour force participation rate remains low, showcasing significant gender gaps.
  • While male LFPR trends are stable, female LFPR has shown fluctuating patterns, indicating the need for targeted interventions.

MISSION POSSIBLE: JOB CREATION FOR YOUTH

The ILO report recommends five groups of policy measures.

1. Employment-Intensive Growth Strategies

• Prioritize job creation through high-growth sectors like manufacturing.
• Support modern manufacturing and services sectors with favorable policies.
• Focus on labor-intensive industries for absorbing unskilled labor.
• Special attention to micro, small, and medium-sized enterprises (MSMEs).
• Enhance agriculture productivity to create non-farm jobs and foster entrepreneurship.
• Invest in green and blue economies for employment opportunities.
• Support with strategic investments, capacity-building, and policy frameworks.

2. Improving Job Quality:

(a) Strategic Sectoral Investments:

• Target sectors with potential for youth employment, such as healthcare and the digital economy.
• Implement regulations to ensure fair and quality employment in these sectors.

(b) Inclusive Migration and Urbanization Policies:

• Develop policies that accommodate the urbanization trend and rural-urban migration.
• Ensure international migration policies support migrant workers and their rights.

(c) Ensuring Basic Rights and Quality Employment:

• Enforce labor policies and regulations that safeguard workers’ rights across all sectors.
• Promote a minimum standard of job quality to enhance overall employment conditions.

3. Overcoming Inequalities

• There are stark inequalities in the labour market and a pressing need to create good-quality employment.
• The ILO report has six recommendations to improve the current situation:
  1. Formulate policies to encourage more women to join the workforce with emphasis on quality job opportunities.
  2. Develop targeted strategies addressing unemployment among youth, including those not in education or training.
  3. Incorporate quality skills training in education to empower socially and economically disadvantaged groups for better job prospects.
  4. Improve access to technology and digital literacy to reduce disparities in accessing job opportunities.
  5. Implement measures to counter discrimination against women and marginalized communities in the labor market.
  6. Adopt policies at regional levels to mitigate labor market disparities across different areas and states.

Top of Form4. Effective Systems for Skills Training and Active Labour Market Policies:

• Skills Development and Labour Market Policies: Develop policies that focus on skill development to bridge job supply-demand gaps and promote inclusivity in the labour market. Encourage state governments to partner with the private sector for effective implementation.
• Youth Employment Programs: Facilitate better connections between youth and job opportunities through improved labor market information systems. Provide guidance and support to marginalized youth segments.
• Public Sector Job Vacancies: Utilize technology for efficient assessment and transparent selection procedures to address unfilled vacancies in the public sector.

5. Bridge the Data Deficit:

Urgently improve the reliability of labor market statistics to enable policymakers in drafting more effective employment policies and strategies. Collaboration among policymakers, educators, and employers is essential to empower youth and women with the right skills for meaningful employment, leveraging India’s demographic advantage