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India’s youth face 42% unemployment: State of Working India 2023 report

In the wake of India’s rapid economic expansion, a report titled “State of Working India 2023” by Azim Premji University…

In the wake of India’s rapid economic expansion, a report titled “State of Working India 2023” by Azim Premji University reveals a concerning statistic: the unemployment rate among graduates under 25 years old has surged to a staggering 42% in the aftermath of the Covid-19 pandemic.

The report further highlights a noteworthy trend. After experiencing a prolonged period of stagnation since the 1980s, the proportion of workers engaged in regular wage or salaried employment began to rise in 2004. This shift was evident among both men and women, with the percentage of men in such roles increasing from 18% to 25% and women from 10% to 25%.

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Between 2004 and 2017, approximately 3 million regular wage jobs were generated annually. However, this annual figure swelled to 5 million between 2017 and 2019. Unfortunately, since 2019, the growth in the creation of regular wage jobs has decelerated, attributed to both economic slowdown and the disruptive impact of the pandemic.

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Encouragingly, there’s evidence of upward mobility. In 2004, over 80% of the sons of casual wage workers found themselves in similar casual employment. This pattern extended across all social groups, including SC/ST workers. However, by 2018, for non-SC/ST castes, this figure had dropped significantly to 53%, accompanied by a rise in better-quality jobs like regular salaried positions. Although the decline was less pronounced for SC/ST castes (86% to 76%), it was still noticeable.

The ‘State of Working India’ report also highlights positive changes in gender-based earnings disparities. In 2004, women in salaried positions earned 70% of what their male counterparts did. By 2017, this gap had narrowed, with women earning 76% of men’s wages. Remarkably, this trend remained consistent through 2021-22.

However, traditional gender norms continue to influence women’s employment decisions. In urban areas, as husbands’ incomes rise, women are less likely to participate in the workforce. Interestingly, there’s a U-shaped relationship, with the likelihood of wives working increasing. But that happens again once the husband’s income crosses ₹40,000 per month. Additionally, there’s a significant intergenerational effect of gender norms at play.

The report also sheds light on the representation of lower-caste entrepreneurs. Even in the smallest firms, SC and ST owners are underrepresented compared to their presence in the overall workforce. Notably, this underrepresentation becomes even more striking among firms employing more than 20 workers.

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