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There
is a lot of talk nowadays about the economic benefits
that a demographic bulge - in the form of a relatively
large proportion of young people in the total population
- can provide. It is argued that when there are more
people who can work, and less dependents, economies
can produce more, at a faster rate.
What
this argument misses, of course, is that those of working
age should actually be working, so it is not enough
to look at the numbers in a certain age group, but also
to see whether they are gainfully employed. Indeed,
if there is a population bulge without enough employment
generation at the same time, what is seen as a demographic
nightmare can actually become a social and economic
nightmare.
This is why the most recent NSS data on employment and
unemployment, based on a large survey conducted in 2004-05,
creates such concern. While overall labour force participation
and employment have increased since the previous large
survey conducted in 1999-2000, the same is unfortunately
not true for the young.
In fact, labour force participation rates fell quite
substantially for male rural youth, and did not increase
for young women in rural areas either. In urban areas,
there was a slight recovery of labour force participation
rates from the low levels of 1999-2000, but only for
young women in the age group 20-24 years was there evidence
of any real increase.
It is certainly possible that falls in labour force
participation among the youth result from their delayed
entry into the work force, partly because they are extending
their years of education. If this is so, it would be
a positive sign, indicating a greater degree of skill
formation in the young labour force of the future. However,
this was not the dominant reason. Except for rural females,
where the ratio was very low to start with, there has
been very little increase in the proportion of those
reporting themselves as usually engaged in education.
For young urban females, there was actually a decline
in such a proportion.
What is even more disturbing is that, despite the fact
that labour force participation rates among the young
population have decreased or not increased much (except
for urban women in the age group 20-24 years), open
unemployment rates have increased. Youth unemployment
was substantially higher than unemployment across all
the working age population, and what is more, it also
increased across all categories of young people - men
or women, rural or urban. So the youth are far more
prone to be actively seeking work and not finding it.
Given that open unemployment by ''usual status category''
has generally been low in India because of the absence
of any sort of social protection for the unemployed,
it is disturbing to note that as many as 6-8 per cent
of young rural males and 12-14 per cent of urban male
youth describe themselves as available for work and
seeking it but not finding it. The proportions of young
women describing themselves as usually unemployed are
even larger.
The current daily status criterion describes the nature
of activity on a typical day of the reference week,
and therefore can be thought of as a ''flow'' measure
of work possibilities. By this indicator, open unemployment
levels for the young are truly alarming, accounting
for nearly 20 per cent of urban young men in the age
group 15-19 years and 30 per cent of urban women in
the age group 20-24 years. These numbers translate into
an estimated 36 million young people of between 15 and
29 years who were ''usually unemployed'' at the start
of 2005, and as many as 58 million young people who
were unemployed on any particular day.
Even those who have been educated find it hard to get
jobs, whether these jobs are appropriate to their skills
or otherwise. Educated employment declined slightly
for men between 2000 and 2005, but was still around
6 per cent for those with secondary school degrees and
7 per cent for graduates. Unemployment among educated
women was much higher and also got worse, reaching rates
of 34 per cent for rural female graduates, and 20 per
cent for urban women with high school and above.
Vocational training appears to be doing little to resolve
this problem. To begin with, even in 2004-05 only a
very small proportion of youth, less than 4 per cent,
had received any sort of vocational training. But also
most such training apparently does not increase employability.
The NSSO shows that the proportion that has received
some sort of vocational training is significantly higher
among the unemployed than the employed youth, by all
categories.
If this is a true description of labour markets in India
at present, it has significant implications. One concern
relates to the possibility of missing the window of
opportunity provided by a large young population, because
the economic growth process simply does not generate
enough jobs to employ them productively. Another important
concern follows from this, in terms of the obviously
negative social impact of growing numbers of young unemployed.
This is not simply a general statement - it reflects
a social concern of some urgency, because otherwise
the potential advantages of a demographic dividend will
be outweighed by social instability.
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