Rising unemployment: 3 reasons why India should worry about its graduates

Unemployability is among the bigger challenges facing India (March 2021 average unemployment rate for India was 6.52 per cent, of which urban unemployment was more than a percentage point higher than rural unemployment rates).

However, stated this way it does not define the problem to enable us to think of ways to handle it.

One way to look at the data is to start with looking at who is unemployed and to what extent? Is it the youth who are more unemployed, are the uneducated unemployed more than the educated, among the educated is it the ones with secondary level education or graduate level that are more unemployed?

Also Read: India stares at double-digit unemployment rate, 10 million job losses in May: CMIE

The CMIE data reveals that 37.9 per cent of the urban 20-24-year-olds were unemployed and among the highest of the group that is unemployed.

The 2018 Periodic Labour Force Survey (PLFS) shows that rural females who have studied up to primary are least unemployed (at 0.6 per cent) followed by their urban female counterparts at 1.6 per cent.

Unsurprisingly, rural postgraduate-educated women are in the highest category of unemployment at 36.8 per cent, while rural graduate women follow suit at 32.7 per cent.

Almost one in four urban graduate women are unemployed and one in five urban postgraduate women are unemployed.

Among male rural youth as well the percentage of unemployed steadily climbs from 3.1, 9.5, 18.1 and 13.3 for primary, high school, graduate and postgraduate students respectively. Among urban youth, the numbers are a bit higher but show a similar trend.

The higher unemployment among graduate youth is not only worrisome but also indicative of several issues for the country. Three reasons can be attributed to this trend.

Firstly, graduate youth find it difficult to take up any job and prefer to remain unemployed rather than take up employment.

Their families are possibly able to support them while they look for suitable jobs or prepare for exams that will give them not necessary jobs matched with their education but a certain life.

Also Read: Unemployment rate shoots up to 8% in April; 7.35 million lose jobs: CMIE

Second, the education that the youth have received is of such quality that they are not employable and the industry does not find them attractive enough to employ.

Third, the industry has gotten used to paying less and putting up with lower productivity and thus they do not pay a wage premium for skilled workforce.

While social scientists may try to find which of the reasons contributes most to the alarming trend of a large chunk of graduates remaining unemployed, the education system, policy, and industry need to start doing its part to get the best out of the spending on education.

Only multipronged actions will bring about a change in mindsets of youth, their families, and the industry which would lead to greater employment of the students with higher education.

The Pradhan Mantri Kaushal Vikas Yojana allocated Rs 12,000 crore over the last four years for short-term courses of 150 to 300 hours for skilling the youth and making them employable.

Companies have put in extensive training programmes for the graduates to make them job ready. Both of these solutions help to some extent but are like putting a band-aid on a festering wound.

The higher education system also needs to look at its own offerings to move the needle on greater employment of its graduates.

Skills needed for the workforce need to be taught and instilled among graduates. Interventions in graduate education need to begin with universities working on redesigning courses that are linked to industry needs.

Also Read: 'Indian education system focusses too much on exams, not learning'

Courses need to be designed with focus on understanding the needs of the industry and being co-designed with the industry.

A graduate from the university must not only be an expert at their subject and possess skills to work, but they should also have skills that make them ready to cooperate, negotiate, sell, work in teams, etc.

Universities need to focus on developing competence rather than students passing the exams. Faculty mindsets towards curriculum design and teaching need to undergo changes.

In addition to creating a new category of vocational degrees, it is important to add a skill component to the courses being offered at the universities.

The advantages of more universities adopting skill embedded degrees, as proposed by UGC guidelines to offer internship embedded degrees released in July 2020 will accrue both to the graduate and the industry.

The graduates would be job ready and willing to work in the field of their study. The industry would find enough employable graduates in various fields. Increased productivity of employees would justify higher salaries for those who are skilled.

Universities and institutions of higher education may want to step up on the quality of their education to solve the problem of unemployment, especially of their own graduates.

As a country, we need to move away from incentivising the hiring of uneducated and undertrained men and women if we are serious about universal education.

(Neharika Vohra is the Vice-Chancellor of Delhi Skill and Entrepreneurship University and on leave from IIM Ahmedabad where she serves as faculty in the OB Area.)