New Delhi: After 2030, the share of India’s working-age population will decline, as the country nears the peak of its demographic dividend, according to Azim Premji University’s State of Working India 2026 report.
The report titled Youth in the Labour Market: Pathways from learning to earning was released at Delhi’s India Habitat Centre (IHC) on Tuesday. It highlights growing but unequal access to higher education and the challenges young people face moving from education to employment.
“The pace of job creation in the coming decades is critical to ensure that the demographic dividend translates into an economic one,” reads the report, highlighting that India has made substantial progress in expanding access to higher education for its young population, ensuring a movement out of agriculture into industry and services.
The report noted that challenges remain. The extent to which the large, increasingly educated and aspirational cohort is absorbed into the labour market will determine whether India’s demographic dividend translates into an economic dividend.
“The report traces the journey of a young worker from education to job search and employment and how this transition has evolved over the last forty years,” said Rosa Abraham, lead author of the report and associate professor of economics at Azim Premji University.
Abraham said, in the last 40 years, India has made considerable progress in higher educational enrolment, particularly among women. According to the report, among men aged 15-19, enrolment increased from 49 per cent in 1983-84 to 73 per cent in 2023-24. For women, it went from 38 per cent to 68 per cent.
She also pointed out that despite the rise in educational enrolment, there’s been a steady decline in employment.
“There is a very steady entry of young women into education and not necessarily at the cost of employment,” she said.
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Regional variations
The report finds that the increase in educational enrolment comes against the backdrop of the expansion of higher educational institutions across the country and of vocational training institutions.
But the expansion has been unequal, and large regional variation remains, according to the report.
Among the northern states of Bihar, Jharkhand and West Bengal, institutional availability remains low compared to the rest of the country.
The report noted that since the 2000s, ITI expansion has come at the cost of institutional quality.
“ITI quality rankings have deteriorated in the last few decades…Private ITIs have lower rankings on average, compared to public ITIs,” reads the report.
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Youth in labour market
According to the report, the exit of workers from agriculture, which has characterised India’s labour market, has happened at a much faster pace for young workers, particularly young women.
The report finds that young women are increasingly employed in manufacturing, driven largely by employment in the Textile and Apparel industry.
According to the report, caste and gender-based occupational segregation has weakened over time, and younger generations of workers are less likely to be in industries that are traditionally associated with their caste or gender.
The authors have outlined policy priorities such as expanding adequate salaried employment opportunities to meet the aspirations, integrating school and vocational curricula to bridge education and skill gaps, and strengthening the school-to-work transition by systematically strengthening the National Career Services (NCS).
(Edited by Theres Sudeep)