Rosa & Tamoghana on India's Youth Employment Crisis

State of Working India 2026 Report Decoded

Hi, I’m Kashish.

A few weeks ago, I covered Azim Premji University’s State of Working India 2026 report on The Daily Brief by Zerodha. The piece focused on one paradox: that in India, the more educated you are, the more likely you are to be jobless. Graduate unemployment among the youth is 40%; for illiterates, it’s 3%.

Twitter gave us a lot of love for that one!

Writing that piece left me with more questions than I started with. So I decided to do something about it — I reached out to Rosa Abraham and Dr. Tamoghna Halder, two of the authors of the report, and asked if they’d be willing to come on Subtext for a longer conversation. Generously, they agreed.

What followed was about 45 minutes of me poking, prodding, and occasionally challenging some of their framings. I won’t pretend I came away with neat answers to everything — the labour market doesn’t work that way. But I came away with a much sharper sense of why this problem is so hard to fix, and where the report’s authors themselves see the cracks in their own diagnosis.

This is a recap of what we discussed. If you want the full conversation, the video is up on YouTube — and trust me, it’s worth your time.

You can also tune into Spotify or Apple podcast, if you prefer listening on the go!

---

On the lifecycle framework

The first thing worth understanding is how the report is structured. Most labour market analyses jump straight to employment outcomes — how many jobs, what wages, in which sectors. State of Working India 2026 does something different. It traces the lifecycle of a young Indian, starting before they enter the labour market, through their job search, and into actual employment.

Rosa explained the reasoning: you simply cannot separate employment outcomes from what came before. The choices a young person makes — and is forced into — around higher education and skilling shape everything that follows. So the report begins with questions like: how long should young people study? In what fields? Where can they access decent training? And it then follows them through the job search and into work.

This framing was genuinely useful for me as a way to organise my own questions, and it became the spine of our conversation.

Education: investment or signal?

I started with a question I’d been chewing on. The report shows a 42x explosion in higher education institutions since liberalisation, alongside collapsing student-teacher ratios and a chorus of employers saying graduates aren’t job-ready. So has Indian higher education become less about building skills and more about social signalling — where the degree is the entry ticket, regardless of what you actually learned?

Rosa’s answer was nuanced: it’s not one or the other. Both roles matter, and the literature increasingly says so. But she conceded that in India specifically, the signalling function is stronger than in higher-income countries. There, employers are increasingly skipping the degree check entirely — asking candidates to take tests, attend interviews, and prove their fit. In India, that hasn’t happened. The degree certificate is still the entry ticket.

Tamoghna added a dimension I hadn’t considered. For marginalised caste groups, higher education has historically been a channel of social mobility and a question of dignity. Even when the labour market returns are unclear, getting a degree confers a social prestige that has its own value — and explains why families continue to invest even when the economics don’t quite add up.

Is the male enrollment drop a rational calculation?

This led me to my next question. The report shows male tertiary enrollment falling between 2017 and 2024 — from 38% to 34% — with most of those who dropped out citing the need to support household income. I’d assumed this was families finally pricing in the declining graduate premium and concluding that a Tier-3 private engineering degree was no longer worth the cost.

Rosa pushed back, and I think rightly. The survey actually asks people two questions: are you out of education because you needed to support family income, or because you didn’t think education was necessary? If families were making the rational calculation I’d assumed, you’d expect the second category to grow. It hasn’t. It remains a very small share.

She also pointed out that even though the graduate premium has dampened for men, it hasn’t disappeared. Graduates still earn roughly double what non-graduates earn at entry. And the return-on-investment calculation — accounting for those forgone working years during education — still favours the degree, because it remains the entry ticket to salaried work.

And then there’s the marriage market. Rosa put this beautifully: “Showing that you’re a graduate is now a big deal. It’s not easy to find a partner without at least a degree.” Education isn’t just a labour market product. It’s also a marriage market product, and that demand isn’t going anywhere.

The enrollment numbers are misleading us

I followed up with a question about the doubling of enrollment in the poorest quartile. On paper, that looks like progress. But engineering and medicine — the degrees that actually lead to salaried work — cost more annually than the entire per-capita expenditure of those households. So are these families really accessing the high-return degrees, or being absorbed into low-cost humanities and commerce programs?

Rosa agreed the enrollment numbers do mislead. Yes, more poor families are entering higher education. But they’re being systematically sorted into the degree tracks that offer the weakest returns. The high-return professional degrees remain prohibitively expensive — which is exactly why she argues for affirmative action and subsidies in engineering and medicine.

Then she said something that I didn’t expect from an economist. She made a case that we should stop thinking about education purely instrumentally. There’s value in being on a campus, meeting peers from different backgrounds, learning things that don’t show up in a wage premium.

“Premiums are dampening, but that doesn’t mean we shouldn’t have campuses anymore.”

Tamoghna built on this. Education as a project of nation-building and shared citizenship is a completely different lens — and the labour market premium is only one narrow way to evaluate its worth. Worth sitting with.

The 40-year unemployment puzzle

Then I asked the big question. Graduate unemployment among the youth has been stuck between 35% and 40% since 1983. Is this just a structural feature of India that we have to accept — or is it a crisis worth solving?

Rosa’s answer surprised me. She said yes, it’s structural — but maybe we’re paying too much attention to that number. Because high graduate unemployment doesn’t only reflect a lack of jobs; it also reflects the fact that more households can now afford to wait. The graduates who show up as unemployed in the data are queuing for better jobs, which is, on its own, not necessarily a bad thing.

The more worrying number, she said, is what happens after the wait. Track young graduates who report being unemployed, and within a year only 7% secure salaried employment. That’s the real cause for concern: not the headline unemployment rate, but the fact that even when graduates do find work, very few find the kind of work they were hoping for. India just hasn’t been able to create the volume of good jobs that this educated, aspirational cohort demands.

Queuing versus fallback

Building on this, I asked which is better for the economy — graduates who queue (sit out preparing for government exams) or graduates who fall back (take whatever informal work is available)?

Rosa called this a tough one, and her answer was instructive. Queuing can be productive if it involves skill-building or genuine preparation. But it can also take “very nasty forms,” involving long stretches of unproductive waiting. Fallback work, on the other hand, is fine if it serves as a ladder into better employment — but in India, that ladder mostly doesn’t exist. People who enter as gig workers or informal labourers tend to stay there. Stuck.

She made a striking observation here. She linked the protests in Noida earlier this year to exactly this kind of stuckness — workers who have been doing the same thing for years without seeing wage or position increases, and the political restlessness that creates. Both forms of underemployment, in her view, can manifest in dangerous ways.

Tamoghna added something I want to keep coming back to. In the West, factory floor work isn’t socially coded as a “bad job.” In India, it is. Physical labour itself is the fallback. The aspiration is away from anything physical. That cultural hierarchy shapes which jobs young people are willing to take — and therefore which jobs the economy can actually fill.

The migration story

When we got to migration, Tamoghna laid out three flows. First, workers move from poorer states to richer states. Second, they move from younger states (Bihar, UP) to older states (the south, Maharashtra) — which means migration is partly balancing out India’s demographic imbalances. Third, networks matter enormously. Bengali workers cluster in Kerala. Madhya Pradesh workers concentrate just across their own state border. Migration follows known faces, family connections, village ties.

It’s a fascinating mechanism — and as I said in the conversation, labour economics seems to find its own way of balancing things out. But it raises a question the report doesn’t fully resolve: is migration solving the regional mismatch, or is it draining poorer states of the human capital they’d need to build their own economies?

Caste, gender, and where mobility actually leads

The report shows that the share of SC/ST workers in traditionally caste-linked industries like leather and footwear has fallen sharply — from 40% in 1983 to 24% in 2023. I asked where they’re going. Are they moving up the value chain, or just sideways into other low-wage manual work?

Tamoghna’s answer was honest. Mostly, they’re moving into other parts of manufacturing — still physical labour. But he reframed the question for me. Even horizontal movement out of a caste-linked traditional occupation is itself a form of mobility. It might not raise wages immediately, but it’s a first step of exit from inherited identity. That matters.

Rosa added that it’s not all horizontal. Modern services — IT, business support, financial services — have also seen a rising share of SC/ST workers, particularly among the young. There’s a real mobility story there. And for women, manufacturing (especially textiles and garments) has emerged as a major employer of young women — which is a recent and significant shift.

On the demand side

Toward the end, I pushed on the demand side. The report focuses heavily on supply — education, skills, worker characteristics. But if young people can’t find jobs, isn’t the deeper issue that Indian firms aren’t growing into the kind of employers that can offer salaried work at scale? I asked Rosa what India needs more of: small firms, or large corporates.

She came down on the side of the missing middle. Small and medium enterprises are more labour-intensive than large corporates, which tend toward capital-intensive growth as they scale. Credit allocated to MSMEs creates more employment per rupee than the same credit given to a Tata or Birla. She also made an argument that surprised me — that India’s exit problem is underrated. We don’t allow firms to fail. That creates a fear of scaling, because the cost of failure is too high. Without the freedom to exit, you don’t get the freedom to grow.

And then a punchy aside: India’s family businesses don’t really do R&D. The model is mergers, acquisitions, acquiring other businesses — not invention. Real innovation, when it happens, tends to come from smaller firms with the incentive to actually build something new.

Closing thoughts

I asked them, finally, after five editions of the report, whether the trend was getting better or worse — and whether India had time to convert the demographic dividend before 2030.

Rosa’s answer was split. Pessimistic on two recent trends: men withdrawing from education, and women re-entering agriculture. Both are reversals of what should have been steady progress. But optimistic about the broader conversation — the labour market crisis is now a mainstream policy discussion in a way it wasn’t five years ago. Policy has at least recognised the problem. The infrastructure is in place. The question is whether we can synergise it before the clock runs out.

Tamoghna’s reflection was the one that’s stayed with me the longest. He said economists like him and Rosa instinctively think of regular salaried employment as the good outcome. And for most of India, it probably still is. But he genuinely doesn’t know whether that’s still the dream for India’s youngest cohort — or whether being an Instagram influencer, or stitching together income through gig work and platforms, is becoming a viable alternative. The labour market models we have were built for a world that may not exist in five years.

That’s a question I’d love to come back to in a future conversation.

---

For the full conversation, watch the episode on YouTube. Or if you’d rather read the underlying analysis, here’s the Daily Brief piece I wrote on the report.

---

Full Transcript

Transcribed & corrected with AI assistance

[00:00:40] Kashish: hi everyone. I’m Kashish and in this conversation I’m talking to the authors of State of Working India Report 2026. Rosa Abraham and Tamoghna are professors at Azim Prem Ji University and they have authored this report. This is the fifth edition of the report and they’ve been writing it since 2017. This report is all about labour markets in India, and I really thoroughly enjoyed this conversation.

[00:01:03] Kashish: In this conversation. We talked about a lot of micro aspects of the employment market in India, starting from education, talking about women in employment, talking about SC/ST identities, and a lot more, everything from migration to what it takes for a youth to get into the employment market. I thoroughly enjoyed this conversation and I hope you guys enjoy it as well.

[00:01:24] Kashish: Thank you so much for getting on this call. Really happy and, uh, honestly, feeling very proud that, uh, you guys did agree to do this. To start off, why don’t you just, both of you give us a brief as to what you do at a PU and especially what does the Centre of Sustainable Employment does and then we eventually we can get to talking about the report itself.

[00:01:45] Rosa: Um, so I’ll start. I’m Rosa. I work at, um, teach Economics at Dreams University. Um, I’m also a part of the Centre for Sustainable Employment, so CSC is a part of the labour vertical of the Centre for the Study of the Indian Economy, which is a larger research centre within the, within the university. Um, my work over the last seven, eight years as being a part of CSC involves looking at questions around the labour market.

[00:02:11] Rosa: Uh, and a lot of the work that I’ve been doing has come out in the form of the state of working India reports, which CSE has published over the last few years from 2018. And right now we are in the fifth iteration of the report. Um, besides that, in terms of teaching, I teach in course on Indian economy. I also teach a developed new economics course at the university.

[00:02:33] Tamoghna: I have, uh, been accepted with the university for now five, for five years now. And, uh, primarily within the School of Arts and Sciences, I, uh, teach economics and, uh, other courses generally. My research interest has been on questions of identity, whether in contemporary time or going back in economic history.

[00:02:56] Tamoghna: Uh, largely around cost, but also gender. Broadly speaking, I like to do research in a sort of a team and collective, uh, manner. And that’s where I think when I joined after that, I got to see the kind of exciting work that, uh, Rosa and others were doing in Centre for Sustainable Employment, particularly the state of working in India report.

[00:03:18] Tamoghna: And that’s when I got associated with the report first in 2023. That was my first time getting a state and I was. Also learning at that point, how to actually do research. What does it even mean to do research collectively? And from there on, in the last report, 26 report, that journey has been quite amusing in terms of contributing towards the report collectively area.

[00:03:41] Kashish: So, uh, I guess that collective effort does reflect in the report itself. The list of contributing authors is huge and the density at which you guys have touched on really micro aspects of the labour market is indeed commendable. Before I actually get into the report, if one of you could just in two, three sentences talk about what is the report actually trying to answer, what’s that one question that the report is trying to answer, which is sort of like a small elevator pitch about what the report is about, and then eventually we can get deeper into it.

[00:04:08] Rosa: I’m going to give this a shot. So yeah, actually then we, maybe I’ll tell you the original story of the report. Um, when we did the previous iteration of the report, which was the SW 20 23, 1 of the things that kind of got a lot of attention was the fact that graduate unemployment rate, uh, was amongst young graduates was very high.

[00:04:26] Rosa: And so that sort of started the question within, uh, the group and amongst a lot of us on what’s going on. So this report really was trying to look at what is happening with the youth in the labour market in terms of why is it that unemployment rates are so high amongst graduates, what do young workers do or what do youth do once they finish education?

[00:04:46] Rosa: How do they go about finding work? Um, how long do they look for jobs? And then what do they finally end up as? I mean, that’s broadly what we were trying to look at, but in the course of writing the report, it no, it became 242 pages where we ended up looking at a lot more and, you know, going into a lot of depth with each of these questions.

[00:05:04] Kashish: So throughout the report you’ve talked about a lot of concepts, but one thing that really stood out for me was the fact, the approach you took towards the report where you narrated the report through the lifecycle of a youth who before entering the job market, while they’re searching for it and eventually getting into the job market.

[00:05:20] Kashish: So before, rather than me butchering the concept, I let you guys just briefly explain the lifecycle and then eventually I would want to drill down on each lifecycle or each point in that lifecycle, the questions that I had.

[00:05:31] Rosa: Yeah, I mean, so if we were to look at it because it’s the state of working India, maybe the starting point would naturally have been to look at the employment outcomes of young workers.

[00:05:42] Rosa: Um, but as we were. Thinking about this, we realised that employment outcomes, it’s really difficult to separate at least the initial employment outcomes with what went on behind that. So what we call as the pre-labor market choices. Um, so, and that’s when we realised that questions around higher education, uh, skilling, all of these are crucial to understanding what eventually happens later on.

[00:06:05] Rosa: So that’s why you, um, the among, and I had extensive discussions on this, and we realised that really the lifecycle approach was the way to look at it. And so we needed to kind of take a few steps back and not just look at employment outcomes, but, um, we start with questions around higher education and scaling.

[00:06:24] Rosa: Of course, you can, you can say, well, nutrition, primary schooling, all of this also have, have a role to play in final labour market outcomes. But we were very clear we didn’t want to go that far back. And I think there might be other reports that come out that might look at some of these as well. So we said, okay, let’s start with questions around higher education.

[00:06:42] Rosa: So that’s one of the first boxes in the lifecycle. Uh, what do they study? How long do they study? Um, and then from there, now the school to work transition. And so that intermediate stage of how do you go about looking for jobs? What are your networks that you use? Do you use networks again, how long do you wait for a job?

[00:07:01] Rosa: So that’s the school to work transition question. And then finally, actually to look at employment outcomes. So actually, if you look at the employment outcome itself is actually one big chapter of the report, but the report actually contains a lot more on the pre-labor market questions and also the post, you know, the policy implications as well.

[00:07:19] Rosa: So that’s really the lifecycle that we wanted to, uh, take with this report.

[00:07:24] Kashish: Let me start with, you know, the phase one itself, the pre-labor market. And in that you, you’d made an observation how the number of higher education institutions over the past couple of years has gone up a lot, where the same time we saw that the teacher to student ratio had dropped drastically, which is well below what is acceptable by the A ICT norms, right?

[00:07:44] Kashish: And all this while we also have, uh, complaints, uh, from employers saying that people aren’t really employable, the graduates aren’t really employable, this. Let me do the question. Understanding that I’ve always thought education as an investment in human capital of skill building, but at the same time it has a social signalling angle to it, both of which have been addressed in your report.

[00:08:06] Kashish: I want to understand that after all the observations we are making about maybe the quality of education going down, is it that we are failing on the fact it no more is an investment in human capital and it’s all just about social signalling? Or am I being too harsh on the observation

[00:08:21] Rosa: in terms of, you know, the two roles of education, this is how literature looks at it, right?

[00:08:24] Rosa: That education is either, it’s a way to learn things that you don’t know and or it’s a way to signal to an employer that, Hey, I’ve got a degree. It’s, I irrelevant whether the degree actually taught you anything, but the fact that you’ve signalled a degree is another way to enter into the labour market.

[00:08:41] Rosa: Now, I feel like it’s very hard to dismiss or to kind of pin down on whether it’s one or the other. And more and more the literature says that both of these have a role to play. But you’re right that over time what’s happened is that because of this erosion of education in terms of, you know, the quality of education, just not having enough teachers, not having enough classroom infrastructure and so on.

[00:09:05] Rosa: So I think in the Indian context, what’s happening is that education still has a, a signalling road, uh, in a lot of the higher income countries actually, uh, we, we are now seeing a lot of employers saying that you don’t need to show a degree certificate. You come in, do a few tests and try to, you know, a, a attend the interview and they’re able to discern whether you’re fit.

[00:09:25] Rosa: That’s not something that has happened in India as yet. So I do think that the role of the degree as a entry ticket is still very much there. Uh, we can’t discount that as yet.

[00:09:36] Tamoghna: There are also a couple of additional questions around that question of particularly is that education has been for a long time, seen particularly higher education, has been for a long time, been seen as a default option, uh, for particularly the privileged cars groups.

[00:09:55] Tamoghna: Uh, now in that context, particularly for the marginalised cars groups, education in a very different sense has been a channel for a, uh, apart social mobility, but also a question of dignity. That’s where higher education, whether or not you are actually learning something, which is again, the metrics are not necessarily very clear that how do we even capture real learning, real employability, real skills.

[00:10:21] Tamoghna: These are a bit blur, but regardless of what one is learning, I think, uh, the very fact that you are actually entering a college and going out of a college with a degree, that adds to a certain kind of social prestige, which is the reason why, unless all the paths are blocked for you, you would like to actually go to, uh, a college and get a degree even beyond the returns in the labour market, whatever the, uh, labour market returns be.

[00:10:50] Tamoghna: So I think that’s where we do see this. Sorry of the numbers that we are presenting in the report. Yeah.

[00:10:56] Kashish: But, uh, there’s another data point in your report where you were talking about, you know, the male tertiary enrollment actually falling since 2017. It fell from 38% to 34%. Right. And the reason a lot of men were dropping out was to support and supplement their household link income.

[00:11:11] Kashish: That leads me to ask, is it now that people are eventually realising that, is it they’re making a rational economic calculation, whether it makes sense for them to enrol in a private engineering college, maybe as a placeholder, where they might not end up getting employed at a point where they want to get employed and the engineering degree itself is not paying for it, so they’re better off just dropping off.

[00:11:33] Kashish: Is that a valid assertion to make or am I missing something?

[00:11:36] Rosa: Yeah, I think, I think it’s too early to make that assertion. Uh, I, I’m not saying that it may not be, uh, playing out, but I would be cautious about going down that track. And I, and I’ll tell you two reasons why I think that, uh, it’s too early to make this one is, you know, so the point that you make when you ask these men why they are not in education when, you know, it’s an age when they should be in tertiary education.

[00:11:58] Rosa: So the, the, the survey does ask them why you’re not in education and like you’ve said, a large share. So most of the increase or, or the withdrawal from education can be explained by the fact that men are citing that they need to supplement household incomes. Right now, the, the another option that is also asked, uh, in response to why you are not in education, they also asked education do you did not feel that education was necessary.

[00:12:23] Rosa: Now, if, if it really was the fact that you know, your, these households are factoring that oh, education is not giving them anything, then you would think that that would be the predominant response, or at least more and more men would be reporting that. But we don’t see any change in that. That number is actually very, very small, uh, and it has doesn’t increase in that 2017 to 2024 time period.

[00:12:46] Rosa: So that’s one reason why I would be averse to saying that, you know, households are now trying to factor in. The second thing is that, sure, the graduate premium has dampened from 2017 to 2024. It has damp, dampened, uh, and that is amongst men, not, not amongst women, but again, it’s too early for them to make that decision on withdrawing from education.

[00:13:09] Rosa: Uh, because even though a graduate premium is gambling is a very recent phenomenon, but also even despite the, uh, dampening, you’re still seeing that the average graduate earns double a non, right. So the, the premium still very much exists. So there is still a value. And we, in the report we also calculate this returns on investment in education that suppose you didn’t invest in education, you don’t forego those years in labour market.

[00:13:36] Rosa: What was your subsequent earnings over your entire lifetime? The returns on investment in education still remains very high because it’s. Gives you an entryway into salary jobs, it gives you an entryway into good occupations as well. So the premium still exists. So I think it’s still too early. And, and then as some said, there is a social prestige that even if the returns are dampening in the marriage market, whether it’s from men or for women, showing that you’re a graduate is now a big deal.

[00:14:03] Rosa: You can’t, it’s not easy to find a, find a partner without this kind of, at least a degree, right? So, uh, I think it’s, we are not there yet that, uh, households are able to make this kind of, I don’t know if you’d call it a rational choice that, oh, premiums are reducing so we don’t need to study anymore.

[00:14:23] Kashish: Valid. Actually talking, uh, doubling down on this, only another stat that comes to my mind in your report was that enrollment, especially in the lower quartile of economic status, it has doubled to I guess, 15%. Right? But at the same time, we know for a fact that the cost of education, like education inflation is one of the highest in India, right next to medical inflation.

[00:14:45] Kashish: We’ve seen the cost of medical degree, engineering degree go up and quoting your report only it mentions how cost of education, especially in these fields, is much more than the annual income of the household for the lowest quartile. So when we see enrollment numbers in the lower quartile gradually increasing, but at the same time a lot of these degrees still out of reach for them financially, is it even right for us to look at those enrollment numbers?

[00:15:09] Kashish: Do they even mean anything or are these enrollment numbers just like a techmark exercise that they end up getting enrolled in the college just for the sake of it, and which might or might not materially improve their chances of being employable in the future?

[00:15:21] Rosa: Yeah, I think I agree that the enrollment does mislead that you’ve, and this hap this is when you look at enrollment rates by caste or gender, you will see, especially for women, you see that the enrollment gap is completely closed.

[00:15:33] Rosa: Uh, but then there are ob obviously kind of gendered patterns and there’s also patterns by class and caste as well. So yes, the enrollment does mislead, but I I, and I think that what has happened is that your. Educational degrees that are associated with high returns in the labour market are systematically not, not really affordable for marginalised caste households or, uh, for poorer households as well.

[00:15:59] Rosa: Now, to that extent, yes it does mislead, uh, and we need to think more about access to education and that’s where the world of, uh, affirmative action in education, subsidising education for internal, especially for engineering and medicine, becomes crucial. But I also just want to make a slightly more, I don’t know if it’s philosophical, but I think we need to also stop thinking of education purely from very instrumental role of like getting you a degree afterwards.

[00:16:26] Rosa: Right. There is also a certain value in being in a campus, meeting peers from different groups, interacting with different, uh, communities. There is a huge, huge learning that comes from there, which is also then I’ll say that premiums are championing, but we then say we shouldn’t have campuses anymore. I think there’s a huge learning process and learning, which may not have a labour market return, but perhaps we need to not value everything on that.

[00:16:51] Rosa: Very uncharacteristic of an economist to say, but tomo, if you want to add

[00:16:57] Tamoghna: Absolutely. Agreed. Yeah. I think, and, and I think that that also is a part which at risk of digressing, I think education as a project of nation building and citizen, a shared kind of citizen, we is a completely different aspect altogether.

[00:17:11] Tamoghna: So the return to market is a very, very limited way of understanding the premium of, uh, that. Yeah,

[00:17:19] Kashish: fair enough. So, I mean, that’s a digression, which was worth taking, but I’ll bring you back to the topic of employment and uh, in, again, in your report you mentioned how 35 to 40% has been the graduate unemployment rate since 1983, and this has more or less remained that way.

[00:17:39] Kashish: One thing that led me to this question was key. Is this the natural graduate unemployment rate for us as India, or is it more like a crisis that can be solved? Malip? I just wanna ask that, is this a fate of India that we just gotta accept as a feature of India, or do we consider it as a bug worth solving a crisis worth solving?

[00:17:58] Kashish: Because apparently for the past 40 years, even though we have seen a lot of progress in terms of education, employment, what, whatnot, this number doesn’t budge at all.

[00:18:07] Rosa: You’re right. I think it’s a structural feature of the Indian economy, but I think maybe it’s a structural feature that we may, we may be giving too much attention to.

[00:18:17] Rosa: Because on the one hand, the high graduate unemployment could reflect that, you know, you, you just don’t have enough jobs and you’re waiting. But on the other hand, like we also show, it means that more and more households are affording we can afford to wait. Right? Um, now if we accept that maybe also incomes in gone and there’s this affordability aspects and they’re sort of queuing up for the job with that on its own is not a bad thing, then the question then becomes is that does the weight pay off.

[00:18:42] Rosa: And, and I think that is the important question where, and this probably points towards a more recent phenomenon where the weight is probably not paying off as much as it did earlier. I will say that it’s very hard to substantiate this because if you really want to look at, answer this question of does waiting longer pay off?

[00:19:01] Rosa: And what is this? Historically you need information on the same workers that attract over a, you know, during the wait period and subsequently over many generations, which is very hard to get, but at least some initial and true other kinds of analysis, it seems to suggest that the weight is not paying off.

[00:19:17] Rosa: So then I think the worrying number, not the graduate unemployment, the young graduate unemployment, the more worrying number is that within a year. And we see in the report that even after waiting a year, only about, uh, less than about 7% actually finally, of graduates actually finally get salaried employment, which is I think the cause for worry.

[00:19:39] Rosa: And somehow, and then that is probably can’t convincingly say that it’s a recent phenomenon, but then it says that it’s a result that we’ve just not been able to create the kind of good jobs for this highly educated, highly aspirational cohort of young workers. And because the scale of the problem has become so large now, because we have so many more youngsters in the economy, we have so many more graduates, uh, who are youngsters in the economy, then the demand on job creation has also become massive and we just have not been able to keep up with that demand.

[00:20:12] Rosa: So I think that is more the problem, the weight which, and I think the young graduate high unemployment is reflective largely of a weight is a problem to some extent, but it, I think that’s not the biggest problem.

[00:20:24] Kashish: Fair enough. Uh, and, uh, I want you to also contextualise that, uh, uh, another concept that you introduced in your report called the fallback.

[00:20:32] Kashish: Uh, either you can wait or you can fall back to a job which might not be the best suitable job for you, but it still helps you on that buck for your family and still manage to live a life hopeful and aspiring for a much better job, according to you. And again, I’m putting you on a spot here with a very wrong and a very difficult question, but what do you think is better for an economy?

[00:20:55] Kashish: And when I say I say that purely from getting the maximum out of our human capital, is queuing or waiting better or is having a fallback better?

[00:21:05] Rosa: This is a tough one. Um, okay, so when you mean who is it better for right now? Is it at an individual level when you’re thinking about queuing, you are thinking about somebody who’s probably sitting at home and what we call as the unemployed.

[00:21:25] Rosa: Uh, maybe they’re preparing for exams or maybe they’re doing some kind of skill upgradation in that situation, then that queuing takes a certain productive form where you are skilling, you’re upgrading. Then perhaps in the long run, there’s some returns to that. Weight that it takes place. But you also know we are all well aware that a lot of weight happens in the form of not very productive use of time, potentially engaging in activities that are not very good for the economy, good for the nation, good for individuals.

[00:21:55] Rosa: So activities that are not necessarily, I, I’m not sure what the right word is, but not really productive, let’s put it as that. Now that can potentially be individually and in at a macro level, massively damaging. On the other hand, let’s look at the other one, which is the, you know, entry under some kind of employment and what we refer to as underemployment, as a fallback.

[00:22:15] Rosa: And that could involve, you know, moving jobs, moving to different areas, searching for jobs. And TAM can speak about what we see with the informal workers from the ESTRO database, uh, in terms of migration. Now, this kind of, uh, underemployment is fine if you also think that over time that there’s a ladder to this, that you enter as something, you enter as a, as some kind of just gig work or some kind of temporary work, which eventually translates into a pathway into a career.

[00:22:44] Rosa: Now what is happening is that that underemployment is, which then becomes a pathway into good job is not happening in India. So, and that I think is actually more worrisome because then you’re stuck with, you know, people who are just stuck. There’s a form of dis that comes with that stuckness, and you can see that playing out now in protest in Noida, right?

[00:23:03] Rosa: You have, of course, there’s, the guest has been triggered by the fact of, by some recent announcements, but there’s also a sense that, you know, we’ve just been doing the same thing, but we are not seeing increase in salaries. We’re not seeing positional increases as well. And that leads to other kinds of disgruntlement, which manifests in not very productive national base.

[00:23:23] Rosa: So I, I mean nationally. So I think it’s very hard to pitch, which is better, um, at an individual or national sense. I think both of these can take very, very nasty forms, uh, and nasty manifestations. And that’s why I think you should, there’s policy interventions in, in both forms of underemployment as well as unemployment.

[00:23:43] Rosa: And I think the migrant story also points towards a lot of this kind of underemployment searching for work out of distress in the moment. If you wanna speak a little bit of what we are finding with migrant studies.

[00:23:54] Tamoghna: Yeah. So, uh, and also like, like just to quickly, uh, add on to Rosa’s point, I think, uh, maybe we can talk about this or we talk about policies, but largely speaking, when we are talking about good jobs in the Indian context, that also is embedded within the broader context of caste.

[00:24:12] Tamoghna: So in many, many ways, what we think of potential good jobs in India is going to look kind of different than what we would think, uh, let’s say good jobs in other, particularly in Western countries. So a job that has some kind of physical labour and physical, broadly physical labour embedded in it. It is not necessarily a bad job in a country which is developed for, and, but in our case, that is not an aspirational job.

[00:24:43] Tamoghna: That is, that actually suddenly becomes fallback. That becomes a fallback job when you are going and working on a factory floor. So this differentiation also matters in the way that decisions are being played are being taken by individual actors. So the broader embedding of it, once again comes back to some of the fundamental hierarchies that we’ve seen in the society and how the economy s excels around those hierarchies.

[00:25:08] Tamoghna: But coming back to the migration question, I think a couple of things that we really find interesting is that I think there are three broad claims that will pick up and, uh, just for the audience, we are talking about unorganised sector migration. So we are not necessarily talking about all the techies from Cota who are living around white sail.

[00:25:28] Tamoghna: Uh, we are not really talking about them, but we are talking about essentially the construction worker who has migrated to let say Pune or Beru via informal networks, contractors, so and so forth. Largely the unorganised sector migration. And within the sector migration, what we do find is that there are three kinds of flows, three kinds of forces that are driving this migration.

[00:25:52] Tamoghna: One is broadly the flow of migration is coming from relatively weaker states in terms of the state domestic product and so on and so forth, towards relatively stronger states. Relatively better performing, uh, states in that sense. Second, it is flowing from, of course, there are a couple of exceptions that exist, but largely it is flowing from states that are younger to states that are older.

[00:26:18] Tamoghna: So there is also a age channel and in some sense balancing out of this huge bulge that we see in certain states, a certain kind of balancing out, uh, is happening through migration. And the third thing that we see is certainties. This is not something new. Uh, but often we see this at an anecdotal level because we do see, let’s say in our neighbourhood, we will often, we might see that there are let’s say, private security guards from a particular area in the country where they have come from along with them.

[00:26:51] Tamoghna: We also see, let’s say domestic health or contraction workers coming in and all of them share a similar kind of language, so on and so forth. So you do see this clusterings of people coming from a similar state and residing at a particular area within the destination. And this is largely the nature effect in San sense that I know someone from my village, from my district who has gone out and I know this is, provides me with some kind of informal social safety event that if something happens in this unknown land, there will be a Christian known face who can guide me.

[00:27:25] Tamoghna: In settling down there. And we do find that this network also is playing quite a bit of role. For example, we find workers from, uh, west Venal, uh, largely concentrated in Kerala for that matter. Or we see that workers from mother PR is actually just around the border of Mad Kadesh. They’re not really travelling too far, they’re just around the state border.

[00:27:51] Tamoghna: So I think these are some of the interesting channels of migration that you find on how migration is happening and how it is adjusting A, the economy, b, the age imbalances, and finally how it is all being mitigated through the networks. Yeah.

[00:28:08] Kashish: So the migration story is honestly very fascinating. We have states like UP Behar, which are younger and also, you know, relatively poorer states who are the net senders of all this labour migration going out.

[00:28:22] Kashish: And states in the south, which are relatively much more advanced economically and also relatively ageing, are the net receivers. And that sort of balances out the differences, which may have been a problem, but it, I don’t know, really, labour economics just find its way to balance itself out. So that’s, that’s really fascinating.

[00:28:41] Kashish: But coming to the part, you know, after, let’s say people do fi end up finding job, and I guess this is something the Morgana you would be able to better answer in the report, there was mention of how earlier all these employment opportunities, let’s say, you know, in footwear and leather industries, they were dominated by SSTs because, uh, those employment were more associated socially with that sector of people.

[00:29:02] Kashish: But that employment has come down from 40% of total employment in that sector by the folks in SEST category. It’s now coming down to 24%. So I guess that’s good progress. But my question here is that, where is that migration happening to? Is it happening to other adjacent lower end of the economic value chain?

[00:29:23] Kashish: Is it like they’re moving to construction or is it folks moving to upward mobility into higher end of the economic activity? I don’t know, maybe other services industry IT or whatnot. So what does that migration look like, especially when it, when it comes to the identity of SESG folks,

[00:29:40] Tamoghna: where they’re going?

[00:29:41] Tamoghna: Uh, in that sense, I think it is largely within manufacturing. So it is not necessarily that the answer is that the movement is not necessarily happening from there to directly to it. The dominant destination is largely around different types of, uh, manufacturing. So it’s still in some sense physical, physical labour.

[00:30:02] Tamoghna: But I would still like to bring in a, I, I’d like to zoom out from that sector a little bit and think of it in terms of horizontal versus vertical mobility in some sense. Which is to say that if you are reading a traditional occupation, which is almost the poor can quote course of your birth, if you are moving out of that, and maybe you were still stuck within some kind of broader physical, uh, labour, physical labour intensive kind of work, even then this going out of what is known as a traditional occupation is in some terms of mobility.

[00:30:38] Tamoghna: This may not be a vertical upward mobility in terms of income, not necessarily in, in terms of the larger respect that you earn within the society, but at least this gives a first step of exit. So some of this is also by the way, uh, a lot of the highly amate, uh, thought would position itself around the exit from the rural economy and to be integrated in the urban economy.

[00:31:05] Tamoghna: Now, that is not to say that we were suddenly ending up in a, you know, in a brilliant economic situation within the urban economy as well, but at least it’s the first step of Egypt. So that is something that we certainly pick up when we copy the two generations and we see, uh, the declining share of today’s ute within those traditional retired, uh, occupations.

[00:31:27] Tamoghna: But I think the gender story is actually also quite fascinating in that sense.

[00:31:32] Rosa: I mean, I completely agree with Tamar, but it’s also interesting that we do see that your modern services, so the IT and financial services, business support services are also amongst the industries that have seen an increased share of workers from young workers, from SCSD, of course occupationally.

[00:31:49] Rosa: And in terms of hierarchy, where they fall is probably, you know, that there might still be hierarchies there and there’s still that kind of creating that happening that happens. But I think in terms of just wages and prospects, this is definitely a mobility story for sure, for gender. Again, very simpler PA patterns.

[00:32:06] Rosa: But, and I think that gender, there’s a lot of other things and we can come back to that, but again, we are seeing that there’s not good services economy, the business support services, but also manufacturing textiles, very good battle. These have become major employers of young women as well, which is also something which is very recent, especially the entry of young women into manufacturing.

[00:32:29] Rosa: Again, also points towards higher earnings as well.

[00:32:32] Kashish: That’s, I mean, that’s, that’s a valid observation. Now, before I wrap up, uh, just a couple of last questions. I have. Throughout the report, we talk a lot about the supply end of things, uh, the supply aspect of labour, right? We talk about education scaling. I wanted to shift the focus a bit on the demand side.

[00:32:50] Kashish: Where is the demand for that labour coming from? And the Indian economy is such where we have a huge skew of very small enterprises which are not able to scale, but there’s still one of the largest employers of people in the country. If, you know, we were to solve the graduate unemployment problem, let’s say, what does India need more of?

[00:33:11] Kashish: Do we need more of such MSME firms spread across the country, continue hiring a lot of people, even though they won’t really enter the formal sector because the smaller the company, there are no formal salary structures. They don’t come under the PF guidelines, all of that. Or do we need more of tatas with ban’s, larger corporate houses, hiring more and more people?

[00:33:30] Kashish: I know there’s no right answer, but what do you, what do you guys, uh, think about that?

[00:33:36] Rosa: So I think my inclination would be towards the, uh, we need to build up this whole, the middle that we’ve kind of hollowed out, which is our small and middle, um, with small and medium sized enterprises. And multiple reasons for this is because one, these are also prises that tend to be labour intensive.

[00:33:54] Rosa: Even if you scale up a large business, the capacity to hire more workers is ly constrained simply because they will move towards capital intensive, small and medium, but where you can grow and also create jobs with growth. So, you know, even if you were to provide credit to small and medium, that would be directed towards more and more.

[00:34:13] Rosa: I mean, the capacity, the potential employment creation from credit allocation is going to be much higher as against value into a larger, uh, business. And I think that is one big reason. But also just from a welfare perspective, right? I think we all know that monopolies, you know, having these large firms, which control large section of our markets also has very damaging effects on consumer welfare as well.

[00:34:38] Rosa: I mean, purely from the economic top. And I think there is value in having number of small firms it brings about competition. It makes sure that prices also remain competitive, right? And I think that’s also another, and it’s not from an employment creation perspective, but just purely from the welfare perspective.

[00:34:57] Rosa: And I think that’s where the policy levers need to intervene. Because a lot of the constraints, and I’m not talking about the labour reform kind of constraints, but the constraints around registering your business, even exit from a. Uh, or, uh, or, or having r and d uh, support for r and d. These things are really take, it’s a binding constraint for the small firms, not for the larger firms.

[00:35:19] Rosa: And I think the exit is something that we don’t talk about enough that I think we don’t have the luxury to fail anything. You know, so the many, many of these small and medium enterprises, there is, of course there’s fear in scaling because there’s a huge penalty and there’s very, it’s difficult to exit.

[00:35:35] Rosa: Uh, and I think we need to be allow, allowing the exit to happen. I think recently there was some discussion around where does air r and d take place? You would think that, you know, the large forms, um, the large family enterprises should, would be investing a lot in, in r and d. We are not seeing that happening in India.

[00:35:53] Rosa: When have we as a com, whenever any of our family businesses actually invented something or developed something locally. We are not seeing that. More and more. The model is about mergers, accusations, acquiring businesses, and that’s where I think, again, small and medium is where there is potential to innovate.

[00:36:09] Rosa: There is a, an urge or an incentive to innovate. So again, one more reason to be focusing on that side in terms of the demand creation.

[00:36:17] Kashish: One last question I had before I let you guys go. And I want you guys to answer it in succinct manner possible. You, you guys have been working on it for seven, eight years.

[00:36:26] Kashish: This is the fifth edition of the report. All these five editions, do you see the trend going up or down? Are we getting better off when it comes to labour market or are we going worse? And another thing that in the report mentions by 2030 we’ll reach that demographic dividend peak. It’s just five years away now, four years, rather.

[00:36:46] Kashish: Uh, are we too late to translate that into good economic dividend for US country? These are the two questions I have.

[00:36:54] Rosa: Come on. Do you wanna go first on this?

[00:36:55] Tamoghna: No, because I have not been assert it with, uh, very books in 17. Uh, this is only my second one, so yeah, I’ll let Rosa answer it and then I’ll add.

[00:37:06] Rosa: Okay.

[00:37:07] Rosa: Let me, let me, okay. So yes, five years of the report and what have we seen? I think that from 2017 we are seeing things that we’ve not seen before. Two things being the withdrawal of men from education and reentry of women into agriculture, which is both, uh, very, very worrying trends. So in that sense, I am pessimistic.

[00:37:26] Rosa: But here’s where I’m optimistic. I’m optimistic because if you see the last few budgets, we are seeing a recognition that this is a problem. I won’t, I think the interventions on that recognition, I’ve not been maybe as not what at least one would expect is still scope to do a lot more, but. What I’m seeing now, and this is something that, you know, we’ve also talked about in various addition, when we release a report that the crisis in the labour market has become a mainstream discussion, which I think is something that we are very, in a way, happy that report is somewhat contributed to and people are talking about it, understanding some of the nuances.

[00:38:04] Rosa: So that’s where I’m optimistic about that, you know, since it’s enter into mainstream conversation, it’s only a matter of time and policy is already recognised that there is a problem. And I think that’s a big step. So in that sense, I am optimistic, but you’re right, clock is sticking. It’s only a matter of time and as we say in the report that, you know, are we going to grow old before we get rich?

[00:38:25] Rosa: We are potentially going down that path. But you know, the thing is again, like we say, the infrastructure is in place. We have our schools, we have our colleges, we have the school to, you know, the, the national career services team that can actually link workers and employers. It’s just about how do we synergize this?

[00:38:43] Rosa: And I think that’s where policy really needs to step up.

[00:38:46] Tamoghna: Just to quickly add on the point, the larger stories, uh, which the numbers are telling, what can interpret it in their own sort of ways, in their own sort of context, et cetera. But what I really think has two things that have changed over the last, I would say broadly since 2010 would be a good way to put it.

[00:39:06] Tamoghna: But yeah, like broadly in the last 10, 15 years, one, just like Rosa was mentioning about the importance of acknowledging the crisis of labour market. Alongside that, I think that at one thing that has really changed in last 10, 15 years is the word skill has become a buzzword. And now that has, uh, has multiple implications, including the fact that many of the things that we did not earlier think about within our conversations in terms of the labour market.

[00:39:35] Tamoghna: Now you cannot actually ignore certain skill training programmes, certain institutions that have been here in India for 75 years, uh, all throughout the independence. Now we are actually finally looking at them. We are turning our gaze at these particular institutions such as itts and others. And I think that focus is something from a policy perspective is going to be very crucial in the next few years.

[00:40:03] Tamoghna: If we can do something positive on backside, if we can actually bring the prestige of vocational education on which right now there is a lot of, uh, scrutiny going on and a lot of discussion going on, if we can bring it at the same level as the advocation, then I think that’s going to be a fantastic outcome in some sense.

[00:40:22] Tamoghna: The last thing that I wanted to point out is that sometimes of an economist say really seen outdated in some sense in terms of understanding how exactly for that matter, how exactly my students are when I’m teaching, let’s say I really don’t know if my students are learning the same way that I learned.

[00:40:40] Tamoghna: I actually am not in a place to sort of demand that they must learn in the same kind of way that I learned. The reason why I’m giving this analogy is we really not know what today’s young answer, irrespective of their educational profile, their social profile, how do they look at labour market. So from my perspective, and I’m sure even from Rosa’s perspective and from a lot of economics perspective, salaried employment, regular salaried employment, employment with contract grant, contractual safety and all of those things are actually a good outcome.

[00:41:14] Tamoghna: And I’m sure for a, for a huge section of India that is true. But for the young especially, I really don’t know whether back remains the dream or not being an Instagram influencer and earning money or just doing part-time work and earning money through back. Uh, are these real river market options? Are these becoming labour market options?

[00:41:39] Tamoghna: If so, are they only restricted to a certain state of the society or is it a widespread kind of, uh, aspiration? I think coming years will get us to some answer, but at least right now I don’t have that answer. So that’s the blurry part for me when I try to kink of path of employment going forward.

[00:41:57] Tamoghna: Personally speaking.

[00:41:58] Kashish: Yeah, I mean that’s all the questions I had. Uh, if there is anything, uh, I missed from the report that is worth talking about, the floor is yours. If not, it’s been a lovely conversation. Honestly. Is there anything we missed?

[00:42:11] Rosa: Um, no, I think we’ve covered, yeah, I think most of it, most of the big points are there, but this was great.

[00:42:16] Rosa: Thank you so much.

[00:42:17] Kashish: Thank you so much, Rosa. Thank you so much Tona, for taking out the time. Really appreciate it. Thank you so much.

[00:42:23] Rosa: Thanks. Bye.