New Delhi: A recent report by Azim Premji University has highlighted persistently high unemployment among India’s youth despite decades of expansion in education. According to its State of Working India 2026 report, unemployment is close to 40% among those aged 15–25 and around 20% for the 25–29 age group, pointing to a growing disconnect between educational attainment and job creation.
The report notes that India’s youth population (15–29 years) stands at about 36.7 crore, making up nearly one-third of the working-age population. Of these, roughly 26.3 crore are no longer in education and represent the potential workforce. With a median age of 28, India remains one of the youngest economies globally, but the study cautions that this demographic advantage will begin to diminish after 2030, making employment generation in the coming years especially crucial. It adds that the transition from education to stable employment continues to be a major challenge.
Data from 2023 shows that around 1.1 crore out of 6.3 crore graduates aged 20–29 were unemployed. While about half of young male graduates reportedly find some form of work within a year, only a small fraction—around 7%—secure permanent salaried jobs. The report also indicates that graduate unemployment has remained consistently high, hovering between 35% and 40% since the early 1980s, The Wire reported.
Although educational enrolment has risen significantly over the past four decades, bringing India’s tertiary enrolment rate to about 28%, comparable with countries of similar income levels, the gains are uneven. Female enrolment rose substantially from 38% in 1983 to 68% in 2023, while male enrolment increased from 49% to 73%. Enrolment among Scheduled Castes and Scheduled Tribes also improved but still lags behind the national average.
However, the report flags a recent decline in male participation in education, noting that the share of young men enrolled fell from 38% in 2017 to 34% in 2024. It attributes this largely to financial pressures, with a majority reportedly leaving education to support household incomes.
The expansion of education has been driven largely by private institutions, which have grown rapidly since economic liberalisation. The number of higher education institutions increased sharply, and access improved in terms of college density. However, the report points to quality concerns, including a shortage of teachers and higher student-to-teacher ratios, particularly in public institutions.
A similar pattern is observed in vocational training. The number of Industrial Training Institutes has expanded significantly, with private players accounting for the majority. However, the report suggests that this growth has often come at the cost of quality, with weaker links between training and actual employment opportunities in sectors like manufacturing.
Despite broader access, financial barriers remain a concern. Professional courses such as medicine and engineering are still expensive relative to the incomes of poorer households, limiting access and reinforcing inequality in high-paying professions.
The report observes that graduates continue to earn significantly more than non-graduates, with a wage premium that increases over time. However, entry-level salaries for young male graduates have largely stagnated over the past decade. At the same time, the gender pay gap among graduates has narrowed, with young women earning on par with men.
In terms of employment patterns, younger workers are moving away from agriculture, although women’s participation in the sector has recently increased. Young women are increasingly entering modern service sectors such as IT, manufacturing, textiles, and business services, while young men are more likely to find work in trade, transport, and construction.
The study also points to a gradual decline in caste- and gender-based occupational segregation, with more diversification in the types of jobs held by marginalised communities. Migration remains a key coping mechanism, with youth making up a large share of informal migrant workers, particularly from states like Bihar and Uttar Pradesh to regions such as Delhi, Haryana, and Punjab.
To address these issues, the report recommends better integration of education and vocational training, strengthening employment services like the National Career Services, and expanding social security measures to support young workers, especially in informal and migrant settings.
Azim Premji University president Indu Prasad was quoted as saying that the rising levels of education and awareness among young people are significant achievements, while Rosa Abraham, lead author of the report and associate professor of Economics at Azim Premji University explained that the study aims to better understand the transition from education to employment and support more coordinated policymaking.