Degrees Without Jobs: 40% of graduates in India can’t find work, fewer get salaried employment, finds report

Eleven million graduates aged 20-29 are unemployed in India, with nearly 40% of those aged 15-25, and 20% aged 25-29 unable to find work after finishing their degrees, according to the State of Working India (SWI) 2026 report, released on Tuesday. The report also finds that only a small share secure stable salaried jobs within a year of graduation.

The SWI 2026 report also throws insight on the mismatch between the number of graduates passing out every year and those getting into employment. Between 2004-05 and 2023 approximately 5 million graduates were added to the workforce each year, but only around 2.8 million found employment, and an even smaller share entered salaried employment. As of 2023, 11 million out of 63 million graduates aged 20-29 were unemployed .

The report prepared by the Centre for Sustainable Employment of Azim Premji University traces the arc of a young worker’s transition – from education to job search into employment, and how this has evolved over the last forty years.

It also states that India is nearing the peak of its demographic dividend with the share of the working-age population expected to begin declining after 2030.

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More women in higher education, fewer men stay on

As per the State of Working India 2026 report, the educational attainment among the youth has risen substantially over the past four decades, particularly among women .

“India’s tertiary enrolment rate of 28% is on par with that of countries at similar levels of per capita income. Between 1983 and 2017, the country made considerable gains in higher education, particularly among women . For 15-19 year old women, the increase has been even sharper, from 38% in 1983 to 68% in 2023. For the older cohort, 20 to 24 year olds, the increase is seen from 2004 onwards,” the report stated.

The report attributes the increase in educational enrolment on the backdrop of expansion of higher educational institutions across the country, and of vocational training institutions , particularly post-liberalisation.

However, the share of young men in education fell from 38% in 2017 to 34% in late 2024. The reason cited was the need to support household incomes for the withdrawal from education. “In 2017, the share citing this reason was 58%; by 2023, it had increased to 72%.”

On the overall count, the 15-29 year olds (the working-age population) in the country constitute about 367 million.

“Of them, 263 million are not in education and constitute the potential workforce. The pace of employment creation for this young generation in the coming decade will be critical in determining whether India’s demographic dividend can be translated into an economic one,” said Rosa Abraham, lead author of the report and associate professor of Economics at Azim Premji University.

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Jobs For Graduates: Post-Covid situation

As per the report, in the post-Covid period India’s employed population has increased from 490 million to 572 million, with employment rates rising from 71% to 74% for men and from 26% to 34% for women, between 2021-22 and 2023-24.

“But the majority of employment creation has been in agriculture . Of the 83 million jobs added between 2021-22 and 2023-24, 40 million have been in agriculture, with women accounting for a large share (38 million),” the report added.

The gap between graduate and non-graduate earnings for youth increased substantially, especially between 2004 and 2011.

However, since 2017, there has been a slowdown in earnings growth for young men. “The gender gap in earnings of young graduates has gradually converged, and by 2023, young graduate women are making as much as young graduate men,” the report stated.

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IT jobs see more women

Apart from agriculture, the traditionally female dominated industries of women were tobacco, education and health.

“These industries are seeing less entry of young women. For women, it is the services sector industries along with apparel manufacturing that have seen the largest increase in young women between 1983 and 2023. The top 10 industries that have seen the largest increase in employment within young graduate women include IT, motor vehicle manufacturing and business support services,” said Abraham.

The report also shows that the number of women in own-account-self-employment has seen a nearly four-fold increase since 2017. This is despite the self employment earnings among women and salaried earnings (for men and women) remaining largely stagnated.

MBBS, BTech Fees: Cost rising despite expansion

The cost of professional degrees have risen significantly over the years. “A medicine degree costs approximately Rs 97,400 and an engineering degree costs about Rs.1,23,000 annually as of 2017-18,” it showed.

Which means that the youth from richer households are far more likely to be enrolled in professional courses like engineering and medicine which are also the higher earning courses with more guaranteed and stable employment outcomes.

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“Conversely, youth from poorer households are far more likely to be in commerce and humanities. This divergence has increased between 2007 and 2017,” the report said.

The SWI 2026 report has found that even though the enrollment rates are higher in richer households, between 2007 and 2017, there is a narrowing of the disparity with a rise in the share of students from poorer households.

“In 2007, only 22% of students came from the bottom two households. By 2017-18, their share had increased to 32%,” it added.

ITIs’ deteriorating quality, vocational courses in schools

The State of Working India report stated, “ITI expansion since the 2000s has come at the cost of institutional quality.”

The deduction is based on indicators namely:

• Enrolment
• pass percentage
• trade diversity
• ITI quality rankings

“The more recently established ITIs score relatively worse on these and other parameters of quality. Private ITIs have lower rankings on an average, compared to public ITIs,” it added.

As part of the policy recommendations, the SWI 2026 report states:

• Expand adequate salaried employment opportunities to meet the aspirations and capabilities of a highly educated workforce. The exact number of salaried jobs to be created will depend on assumptions made on the structure of the labour market.
• Integrating school and vocational curricula to bridge education and skills gaps and enhance employability.
• Strengthening the school-to-work transition by systematic strengthening of National Career Services (NCS) which offers the potential to reduce labour market frictions by improving linkages between prospective employers and jobseekers.
• Social security systems need to be expanded to support young workers navigating the school-to-work transition, including migrant youth workers.
• Enable a worker to move from unorganised to organised sector jobs.