40% Of India's Graduates Under 25 Years Are Unemployed: Report

The share of graduates among the unemployed young population (20-29 years) has doubled in the past two decades, while India has made substantial progress in expanding access to higher education for its youth, a report titled ‘State of Working India 2026′ released by the Azim Premji University said.

The data showed that approximately 67% of the country’s unemployed youth in 2023 (nearly 1.1 crore) were graduates, compared with 32% in 2004 (30 lakh). At the same time, the share of graduates among youth has risen to 28% in 2023 (6.3 crore) from 10% in 2004 (1.9 crore). Nearly 40% of the 15 to 25 age group and over 20% of those aged 25 to 29 remain unemployed.

India’s youth population, aged 15 to 29 years, is around 36.7 crore, which accounts for a third of the working-age population. The report said that 26.3 crore of this cohort are not in education and constitute the potential workforce.

The report noted that between 2004 and 2023, approximately 50 lakh graduates were added every year, while the number of employed graduates rose by only around 28 lakh annually, out of which only 17 lakh were salaried.

The failure to create adequate jobs has resulted in an excess of graduates relative to available positions. This has also contributed to the slowdown in graduate earnings.

Employability of young graduates, their lack of experience, or a mismatch in skills are among the several reasons for the rising unemployment of the youth.

The report said that there was a greater capacity among the youth to wait before finding a job, a phenomenon that included the poorer households as well, due to better income levels than earlier. Besides, the report noted that while young graduates continue to have more monthly earnings compared to the non-graduates in entry-level jobs, this premium is narrowing over time.

The gap between graduates’ and non-graduates earnings for youth has increased substantially, especially from 2004 to 2011. Since 2017, there has been a slowdown in earnings growth for young men.

Also, since 2017, the share of young men in education has fallen to 34% in 2024 from 38% in 2017, citing the need to support household incomes.

Financial barriers continue to restrict access, especially in professional fields such as engineering and medicine, as the cost of pursuing these degrees often exceeds the annual per capita expenditure for poorer households.

With a median age of 28 year, India has one of the youngest economies globally, but this demographic dividened will start to decline after 2030 making the pace of job creation in the coming decade critical.