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India / Youth Unemployment

India, one of the youngest countries in the world, where youth accounted for 20% of the total population in 2011, according to the Registrar General of India. More importantly, the dependency ratio – the number of children and elderly people per working-age person — declined 21% over the last three decades. In China, the ratio declined 31%, but in the U.S. and Europe it dropped 1% and 7%, respectively, and in Japan it increased 8%, according to United Nations figures. At this rate, India will have the lowest dependency ratio out of these countries and regions by 2030. By that year, India’s working age population is expected to expand to 131% of the 2010 workforce.

However, youth unemployment remains high in India, and it hasn’t been helped by the global crisis. The latest World Development Report by the World Bank says India’s youth unemployment — as a percentage of the youth work force — was 9.9% for males and 11.3% for females in 2010. In 1985, the figures were 8.3% and 8%, respectively. Youth unemployment in India, like most countries, has consistently been above the national average. But of late, the data indicate rising youth unemployment, now virtually 50% more than the national average, or total unemployment rate.

The National Sample Survey Organisation found that India’s unemployment rate fell to 6.6% in 2009-10 from 8.2% in 2004-05. The general perception is that unemployment in India is high, but the actual numbers seem reasonable. That’s because self-employment accounts for about 60% of India’s employed population.

Given the lack of viable employment opportunities, a large number of Indians opt for self-employment. And a big chunk of this includes low-paying activities like hawking magazines and flowers at traffic signals. Casual workers — who get jobs at times and remain unpaid at other times — account for 30%, while only 10% of the working population are regular employees. Given the scarcity of opportunities, higher youth unemployment shouldn’t come as a surprise.

But rising youth unemployment in a country that is expected to reap the demographic dividend is a concern. The latest NSSO survey shows there has been a drop in the labor force participation rates – as in, those who are willing to work – among the youth. Many young people are delaying their entry into the workforce, partly because they are extending their years of education. This at least is positive as it indicates a higher degree of skill formation in the young laborforce…

Choosen excerpts by Job Market Monitor from

via Young, Jobless and Indian – India Real Time – WSJ.

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