STATUS OF YOUTH IN INDIAN LABOUR MARKET: TRENDS AND DETERMINANTS

Abstract

The significance of youth in economic development of a nation is well comprehended, while the role of economic transformation in ensuring a successful 'School-to-Work' transition for the younger generation has remained a solemn challenge for India. Though the neo-liberal era in India marks a demographic and socio-economic structural change in the country, the outward transition of youth from economic activities highlights the significant threat to the inclusive development approach of the country. The objective of this study is to examine the trends in youth labour force and workforce participation in India and to understand the dynamics of changing youth labour market in India. The dynamics of youth labour market have endured substantial changes during the neoliberal regime of India. Despite notifying a 'demographic dividend' phase, a significant share of youth witnessed higher exclusion (unemployment and not in employment, education or training) from Indian labour market. Therefore, this study investigates the role of education in labour market and examines open unemployment. Besides, this study conceptualizes the Not in Employment, Education or Training (NEET) status of youth in Indian context and explores the heterogeneity of NEET youth by analyzing the push and pull role of demographic and socio-economic variables. Furthermore, this study examines the nexus of youth labour market status and economic growth in India to provide plausible recommendations for youth's higher, inclusive and sustained participation in the labour market and the country's development pathway. In order to address the issues mentioned above, this study has utilized the quinquennial (50th round: 1993/94; 55th round: 1993/94; 61st round: 2004/05 and 68th round: 2011/12) and annual (Periodic Labour Force Survey 2017/18 and 2018/19) data on employment and unemployment by the National Sample Survey Office (NSSO). The findings implicate that youth transition in the Indian labour market has shown paradoxical epitomes—indicated by the drastic decline in their labour force and workforce across the gender and sector—with a much steeper decline for the female youth. Furthermore, unemployment among educated youth in India indicates a broken School-to-Work transition, which in the long run is supposed to delay their entry into the labour market, thereby creating a burden of unproductive labour on families, society and economy. The findings of this study highlight that even though there has been a decline in female NEET youth in the rural and urban sectors, their proportion in NEET remains high compared to their respective male counterparts. Also, the representation of female youth from minorities and lower social strata of the Indian society in the NEET category hinders the inclusive approach of Indian economy. A substantial number of youth with NEET status implicates a substantial threat of missing potential human capital from the Indian economy, which, if not tackled at the moment, will incur a hefty economic and social cost to the economy and labour market of the country. Furthermore, the study reveals a bi-fold impact of economic growth on youth labour market status in India. On one side, youth labour force and workforce participation has been observed to share an inverse relationship with economic growth. While on the other side, youth unemployment has been observed to increase with an increase in India's economic growth. Therefore, there is a higher need to develop a strengthened and sustained interconnectedness between youth educational attainment, ‘School-to-Work’ transition, and economic growth to reap the benefits of the country's ongoing 'demographic dividend' phase. Therefore, to utilize the demographic dividend phase of the country, the Indian economy should adopt innovative measures towards the inclusion of youth in full and productive employment. Further, the re-integration of NEET youth into productive economic activities should remain the topnotch priority for the policymakers to tap the potentiality of India's most productive working-age population.