40% of India's graduates cannot find jobs, few get secure salaried jobs within one year: Report

New Delhi: Eleven million out of sixty-three million graduates between the ages of 20 and 29 in India are unemployed, with only a small proportion securing stable salaried jobs within a year of graduation, according to a report by Azim Premji University.

The 'State of Working India' report found that only about 7 per cent of graduates can find permanent salaried employment within a year of reporting themselves as unemployed.

Graduate unemployment remains high -- nearly 40 per cent among those aged 15 to 25 and 20 per cent among the 25 to 29 age group, it said.

"Only a small share secure stable salaried jobs within a year of graduation. The problem of graduate unemployment has been magnified in recent years owing to the growing size of the graduate population," the report said.

According to the report, the youth population has grown substantially in the last few decades, and so has the tertiary enrolment rate, resulting in an increase in the absolute number of young graduates.

"This, together with the high incidence of unemployment, has resulted in a large number of unemployed graduates -- 11 million out of 63 million graduates between the ages of 20 and 29 were unemployed as of 2023," it said.

The report noted that since Independence, India has made remarkable progress in closing some of the educational gaps of the past.

"Gross enrolment ratios in higher education are in keeping with India’s level of development. Socioeconomic barriers in access to education along gender and caste lines have been reduced (although there is still a long way to go), and India has a much more connected and capable workforce entering the labour market as a result.

"This has not, however, been accompanied by an effective transition into employment. Unemployment rates are stubbornly high for young graduates. Access to education is uneven. The school-to-work transition is uncertain and for many, not into stable, remunerative employment," it said.

The share of young men in education fell from 38 per cent in 2017 to 34 per cent in late 2024, with a large share citing the need to support household incomes as a reason for their withdrawal, it said.

"The most common reason given for withdrawing from education is the need to support household incomes. In 2017, the share citing this reason was 58 per cent. By 2023, it had increased to 72 per cent," the report said.

Between 2004-05 and 2023, while approximately 5 million graduates were added each year, only around 2.8 million found employment, and an even smaller share entered salaried employment, contributing to rising graduate unemployment and slowing earnings growth, it said.

"Graduate salaried earnings exceed those of non-graduates at the time of entry into employment and over their lifetime: Graduate salaries are twice that of non-graduates at the time of entering the labour market. These differences widen over their lifetime.

"For men, the earnings premium has stagnated in recent years. However, growth in entry-level salaries of young graduate men has slowed down. At the same time, gender gaps in graduate earnings have narrowed significantly, indicating improved labour market outcomes for young women," the report said.