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India’s Demographic Dividend: Are the Indian Youth Gainfully Employed?

, April 23, 2019, 0 Comments

Youth of today are the key instruments for positive social change and the driving force for economic development and technological innovation. The changing social and economic environment impacts people in different ways and it is the youth that are often required to constantly adapt to this changing environment.

Youth as defined by the National Youth Policy, 2014 are those in the age group 15-29 years. This is the most crucial stage – a stage of transition which sets the course for the rest of our lives.  Therefore, the concerns revolving around youth are of paramount importance to any economy.

According to ‘World Population Prospects -2015’, India has the world’s highest number of 10-24, year olds, i.e., 242 million, despite having a smaller population than China. The growth of youth population in India has been considerable over the years. In 1971, youth constituted 31% of the population, which has increased to 35% in 2011. With the youth in the country projected to grow rapidly – 47% by 2020[1] – there are diverse issues confronting researchers and policy makers on the matter relating to youth.

The major outcome of the demographic dividend in India – besides an addition to the growing population – could imply one of the two things: a boon or a bane. When, and if, harnessed properly, it could mean a growing nation with a less dependent and increase in the supply of work force. On the other hand, it could imply a thorny problem when such a growing human resource remains untapped and initialized.

Mere activity status of the youth suggests the structural gaps in both rural and urban segments to absorb the growing youth in productive work. As per the NSSO-survey of employment and unemployment in 2011, in the rural sector, about 16% of the youth in the age bracket 15-19 were neither in educational institutions nor in the work force. This implies that about 12 million youths in rural India were engaged in domestic duties at an age when the skills and training can equip them for a better future.

Youth enters the labour market essentially in the age group 20-24 years. At this age, a large proportion of girls drop off from both work and education. Therefore, a larger segment of youth at this age in both rural and urban segments were seen involved in domestic duties. This adds up to almost 30 million youth out of training as well as the labor market. Further, about 6% of the urban youth were seeking work, i.e, unemployed. Thus, on one side, a large segment of the youth remained outside labour force. On the other side, a considerable proportion of the youth were unemployed ,which means lack of jobs to absorb the youth.

In the age bracket 25-29, unemployment rate is lower in both rural and urban segments. However, the urban market is slightly more mature as a larger proportion of the youth were employed as a regular wage earner while in the rural segment about 19% of the youth in age bracket 20-24 entered as casual labourers which increased further to 22% in the 25-29 age bracket.


Despite having a large youth population in the country, we are way behind in creating the benefits from it.  Educating and employing the youth at the right age requires structural improvement in both demand and supply side.  The latest NSSO survey of 2017-18 suggests the unemployment rate at 45 year high of 6.1 % [1].  With a 2% unemployment rate in 2011-12, about 5% of the youth were unemployed. What would 6% unemployment rate mean for the youth? Clearly there is a gap and if adequate measures are not taken into consideration, the demographics will fail to deliver growth and development.

The opinions expressed in this article are the author’s own and do not reflect the view of MarketExpress – India’s first Global Analysis & Sharing Platform or the organization(s) that the author represents in his personal capacity.

[1] Youth of India (2017) : Ministry of Statistics and Programme Implementation