Youth employment: Why it's a more pressing issue for India than others

The road ahead needs a concerted effort to develop comprehensive strategies that not only create jobs but also ensure these opportunities are accessible to youth across all regions and demographics

Youth employment remains a critical concern worldwide. Following the disruption caused by the Covid-19 pandemic — including widespread unemployment due to mass layoffs, job shortages, and business closures — the labour market has seen a significant recovery, particularly for young people. This positive trend was underscored by a recent report “Global Employment Trends for Youth 2024”, published by the International Labour Organization (ILO). The report reveals that the global unemployment rate for youth aged 15 to 24 years reached 13 per cent in 2023, a 15-year low. Further, the number of unemployed young people worldwide stood at 64.9 million, the lowest figure recorded since the turn of the millennium. The youth employment-to-population ratio (EPR) reached its pre-pandemic level at 35 per cent.

While these are positive signs for the world economy, the report highlighted significant concerns regarding youth employment. First, although EPR bounced back to its pre-pandemic level, it remains well below the levels seen in the early 2000s. The report suggested an ideal EPR of 40 per cent for both men and women. Comparing it with the current ratio, there is a deficit of 79 million jobs for young workers, 91 per cent of that for females. Differently put, 72 million of the total 79 million missing youth from the workforce are women. Second, the post-pandemic recovery has been uneven across regions, economies, and genders. Youth unemployment in upper-middle-income countries remained above 2019 levels, with a widening gap compared to high-income countries. The youth unemployment rate in upper-middle-income countries is 1.5 times higher than in high-income countries, compared with 1.3 times in 2019. Additionally, young women faced greater challenges, with sharper increases in unemployment during the pandemic and slower recovery compared to men. Third, the global proportion of youth not in employment, education or training (NEET) stands at 20.4 per cent, which is only marginally better than in 2015. Additionally, one-third of countries are falling behind in reducing their NEET rates, with low-income countries and women disproportionately represented.

India reflects the global trend in youth unemployment. The rate more than doubled from 5.7 per cent in 2000 to 17.5 per cent in 2019 but decreased to 12.4 per cent in 2022, according to another ILO report released earlier this year. However, challenges remain, with higher unemployment rates among graduates and women. Additionally, according to the World Bank, 23.5 per cent of Indian youth were classified as NEET in 2023. This situation is concerning, given the narrow timeframe India has for capitalising on its demographic dividend. Thus, while youth employment is a global challenge, it is particularly pressing for India due to its large youth population. The latest Economic Survey emphasised that India needs to create nearly 7.85 million non-farm jobs annually until 2030 to accommodate the growing workforce. However, it is unclear how the Union and state governments will address this need. Although the recent Union Budget announced schemes to boost hiring by private companies, the broader challenge remains significant. The road ahead requires a concerted effort to develop comprehensive strategies that not only create jobs but also ensure that these opportunities are accessible to the youth across all regions and demographics. The success of these initiatives will be crucial in securing sustainable economic growth in the medium to long run.