Number of graduates added to the workforce outpace the growth in their employment: Azim Premji University Report

The employment of graduates in India has nor kept pace with the rapid expansion in the number of graduates in the country, resulting in rising graduate unemployment and slowdown in earnings growth, the Azim Premji University said in its State of Working India 2026 Report, released on Tuesday.


“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.


The report further said that the transition from education to employment remains a major challenge, particularly for graduates.

“Graduate unemployment among the 15 to 29-year-olds remains high, nearly 40% among the 15 to 25-year-olds, and 20% among the 25 to 29-year-olds; and, only a small share secure stable salaried jobs within a year of graduation,” it said.

As per the report, India’s youth population, defined as those between the ages of 15 to 29, is the largest in the world with the 367 million people in this age group accounting for a third of the country’s working age population.

“The extent to which this large, increasingly educated and aspirational cohort is productively absorbed into the labour market will determine whether this massive, and continuing demographic dividend translates into an economic dividend,” it cautioned.

According to the report, the earnings premium for men has stagnated in recent years. “At the same time gender gaps in graduate earnings have narrowed significantly, indicating improved labour market outcomes for young women,” it added.

The report further said that the young workers are exiting agriculture faster than older cohorts and increasingly entering manufacturing and services, particularly women, and key sectors include information technology, automobile manufacturing and business support services.

Moreover, the caste and gender-based occupational segregation has weakened over time with industries traditionally associated with SC/STs having a fewer share of young SC/STs, it added.