Joblessness rising in country with education levels: study

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Last Updated20/02/2024

According to a study by IIM Lucknow, India’s economy is witnessing a stagnating employment growth, weakening employment elasticity and slow structural transformation.
Additionally, structural problems are brewing in the labour market such as low female labour force participation and a rise in the unemployment rate (UR) with education levels.

Surge in output and employment from 1987-88 to 2004-05, followed by 'jobless growth' from 2004-05 to 2018-19, and a minimal rebound afterward.
Agricultural sector, though employing the most youth, contributed low value-added to the overall economy, resulting in significant employment challenges.
Economic growth hasn't translated into job creation and has rather resulted in net labour displacement.

The study suggests identifying and promoting the labour-intensive manufacturing sector to achieve inclusive growth.
Additionally, examining the quality and decency of jobs alongside job quantity is important.
- As there is a strong linkage between productivity and job decency.

There is a significant gender disparity in the labour market and a growing level of unemployment for the highly educated youth than the less educated.
In 2020–21, the total labour force in India stood at an estimated 556.1 million.
Out of this total, 292.2 million (54.9%) were self-employed, 22.8% were in regular employment and an estimated 22.3% were in casual employment.
The UR for the illiterate and less educated class (below primary) was 0.57% and 1.13% respectively.
But for the highly educated class (graduates and above), it was 14.73% in 2020–21 for the age group ‘15–29 years’.

There is a persistence of gender-based disparity in the Labour Force Participation Rate (LFPR) in rural and urban areas.
Additionally, the decline of LFPR is higher for females as compared to males from 1983 to 2020-21.
The overall female Work Force Participation Rate (WFPR) for those aged 15–59 in 2020–21 stood at 32.46%, a full 44.55 percentage points below that of men.
Further, the total percentage of male WFPR (81.10%) in the same year for aged 15–59 years is more than twice the rate for female adults (33.79%).

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and similar initiatives have positive effects on rural livelihoods.
These policies raise wages, increase female labour force participation and improve bargaining power among low-caste workers.