There’s a time-bomb ticking on the employment front. While the rising unemployment level among the youth is a worry, a much bigger cause for concern is that the rate of unemployment has progressively increased with rising level of education for both men and women.
So much so that 16.3 per cent of urban males who are graduates or above in the age group of up to 29 years are unemployed, as per the latest National Sample Survey data. And this percentage has worsened in the past decade.
The rate of unemployment goes up by another 12.5 per cent if diploma and certificate holders are added to the equation. This means that chances of getting employment for young men and women become less once they acquire vocational skills or a college degree. Broadly one in every four men with a graduate degree or a vocational education in this age group is likely to be unemployed in India.
According to the latest NSSO estimates (for 2011-12) this is far higher than the rate of unemployment for those with fewer educational qualifications. (See chart.) As the country goes to vote, jobs are likely to be on top of the mind for the record number of 8 crore first-time voters.
The highly disturbing trend holds true for all categories, including men in rural India and women in both urban and rural areas.
Sunita Sanghi, adviser (Labour) in the Planning Commission, said the data showed that skill development programmes and college education were possibly not creating the sort of training that were in demand in the manufacturing and services sector.
A March 2013 ILO Asia-Pacific Working Paper makes the same point. It shows that even though educational attainment has risen quickly in recent years, gaining a foothold in the labour market remains elusive for many young Indians. Due to the sensitivity of the data, the numbers though collated from NSS studies, were not released by the government agencies.
The picture is worse for women diploma holders and those with graduate degrees compared with men, in both rural and urban areas. This is particularly disturbing as the broader labour force participation rate data shows, over the last decade, the percentage of women who came up for employment has declined.
But as the chart shows, even among them, women who went for diplomas in various trades had a higher unemployment rate of 17.3 per cent, three times the percentage for no-jobs figures for those who had completed only middle school, in urban areas.
The high unemployment rate among women is bad news for attempts to reduce inequality among men and women, as well as for the overall economy.
The data is in sync with the trend among the larger proportion of rural men who are giving up farm sector jobs. But in the absence of better avenues, most of them are forced to pick up jobs in the services sector, especially as construction workers. This explains the low unemployment percentage among non-literates and those with only primary school education, among both men and women.
Comparable figures from highly populated developing countries also show a similar trend. There is a rise in the unemployment rate in sync with the level of education as boys and girls without education often belong to low income households and hence, cannot afford to remain unemployed for long.
In India too, the labour force participation rate for example, is higher among the Scheduled Castes, Scheduled Tribes and Other Backward Classes, especially in the rural areas.