Why youth unemployment is India’s biggest challenge

The India Employment Report 2024

The India Employment Report 2024, brought out by the Institute for Human Development (IHD) and the International Labour Organisation (ILO), has attracted widespread attention. However, some of its findings have been misunderstood or misinterpreted.

Background

The report is based on official data, largely the Employment and Unemployment Surveys (EUS) and Periodic Labour Force Surveys (PLFS), conducted by NSSO. Despite certain changes in the sample design of the PLFS, its estimates are comparable with EUS due to the high level of precision of the all-India and state-level estimates. The analysis compares four years — 2000, 2012, 2019, and 2022 — which capture the changes over the past 22 years, including during the Covid period.

Positive Developments in the Labour Market

• The employment quality, as shown by a robust Employment Condition Index, has improved in all states, albeit differently.
• The share of non-farm employment has increased between 2000 and 2019, indicating a movement towards the structural transformation of the economy.
• Regular employment has increased while unorganised sector employment has declined, except during the Covid period.
• The female workforce participation rate has increased from 24.5% in 2019 to 37.0% in 2023, primarily in the agricultural sector and own-account and unpaid family work.
• Despite the Covid-induced global slowdown, the labour market has bounced back well with an increase in wages for casual workers, particularly in the bottom groups.
• Unemployment and underemployment rates have declined since 2018, with the unemployment rate decreasing from 6% in 2018 to 3.2% in 2023.

Emerging Employment Challenges

• The employment pattern remains skewed towards agriculture, calling for active steps to accelerate the creation of non-farm employment.
• The labour market is experiencing distortions due to the increasing capital and skill-intensive production process, leading to a surplus of unskilled and semi-skilled workers.
• Women’s participation in the labour market is low, with a majority engaged in less remunerative jobs in agriculture, unpaid family work, and as own-account workers.
• Youth unemployment is a major challenge, with educated youth accounting for nearly two-thirds of total unemployment.
• Over 90% of employment is informal, highlighting the need for policies to improve job quality and boost labour productivity.

Policy Recommendations

1. Make production and growth more employment-intensive with a focus on labour-based manufacturing and employment-generating services and agriculture.
2. Improve the quality of jobs by strengthening social protection and promoting formalisation.
3. Overcome labour market inequalities by boosting women’s employment and implementing effective policies to tackle NEET (Not in Employment, Education, or Training) youth.
4. Enhance the effectiveness of skills training and active labour market policies by bridging the supply-demand gap in jobs and involving the private sector.
5. Generate reliable statistics to better capture the complexities of the changing labour market due to rapid technological change.

The writers are team leaders of the India Employment Report 2024 and are with Institute for Human Development

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.1: By 2030, eradicate extreme poverty for all people everywhere.
• Target 4.4: By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs, and entrepreneurship.
• Target 5.1: End all forms of discrimination against all women and girls everywhere.
• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• Target 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.1.1: Proportion of population below the international poverty line, by sex, age, employment status, and geographical location.
• Indicator 4.4.1: Proportion of youth and adults with information and communications technology (ICT) skills, by type of skill.
• Indicator 5.1.1: Whether or not legal frameworks are in place to promote, enforce, and monitor equality and non-discrimination on the basis of sex.
• Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age group, and persons with disabilities.
• Indicator 10.4.1: Labour share of GDP, comprising wages and social protection transfers.

SDGs, Targets, and Indicators Table

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Fuente: indianexpress.com

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