Skill mismatch: Rising labour quality, stagnant employment in key sectors

RBI data reveals rising labour quality in industries like textiles and mining, but stagnant employment growth highlights a skill mismatch

The answer to why workers are not able to find work when industry complains of a shortage is apparent from the rich RBI data store released last week.

We measure it through the index of labour quality indices over the past three decades. This index captures how educated the worker is in each of the 27 industries the RBI data covers. As the KLEMS data set notes, the quality was calculated based on educational qualification and wage rates of the workers.

If the index for a particular industry, say textiles, rises steeply over the years, it indicates