Unemployment among urban youth down in Q4FY23 but still elevated at 17.3%

Job opportunities for the youth in urban India have been on the rise, but are still not enough to enable the country to reap the demographic dividend.

The unemployment rate among the youth (15-29 years) in urban India fell during the fourth quarter of 2022-23, but it still remained elevated at 17.3 per cent against 18.6 per cent in the third quarter, raising questions on India enjoying the benefits of an overwhelmingly young population.  

The unemployment rate among the youth in urban India stood at 20.2 per cent in the year-ago period (January-March, 2022).  

Almost 23 per cent of young females who wanted to work were jobless during the fourth quarter of FY23, though this was lower than 25.1 per cent in the previous quarter and 25.3 per cent a year ago, according to the periodic labour force survey (PLFS) released on Monday.

The unemployment rate among the young males was relatively low, yet elevated–15.6 per cent were unemployed during Q4 of FY23 against 16.6 per cent in the previous quarter and 18.8 per cent a year ago.  

States such as Rajasthan, Himachal Pradesh and the union territory of Jammu and Kashmir had over 30 per cent unemployment rate in the fourth quarter of 2022-23.

In fact, the jobless rate in Himachal Pradesh rose from 25.3 per cent in Q3FY23 to 31.8 per cent in Q4 of the year. As many as 27.7 per cent youth were unemployed in the state a year ago.

The jobless rate among the youth in Jammu and Kashmir fell to 31.5 per cent in the fourth quarter from 34.2 per cent in the third quarter and 35.8 per cent in the year-ago period.

Rajasthan saw 30.3 per cent of its youth in urban areas facing unemployment against 33.8 per cent in the previous quarter and 32.2 per cent in the fourth quarter of 2021-22.

While the survey does not give industry-wise employment data, it showed that self-employed and casual workers remained almost intact in the fourth quarter of 2022-23 against the previous quarter for all age groups. As many as 39.5 per cent workers are self-employed compared to 39.6 per cent over this period. Within this category, the proportion of unpaid helpers in household enterprises rose to 6.1 per cent from 5.9 per cent.

Casual workers constituted 11.7 per cent of total workers against 11.8 per cent over this period.

Amitabh Kundu, a senior fellow at think tank WRI India, said the unemployment rate in the age group of 15-29 is generally higher than in the age group older than that. 

The unemployment rate for 15 years and above fell to 6.8 per  cent during the fourth quarter of 2022-23 compared to 7.2 per cent in the previous quarter and 8.2 per cent in the year ago period. This indicated that the unemployment rate in the age group of 29 plus years is quite lower than among those aged 15-29 years. 

The reason for the young population having higher unemployment rate than their older counterparts is that the former enters the labour market for the first time and hence may not get employment immediately, Kundu said.

Besides, it seems that education level among the young has gone up which prompted them to wait for right kind of jobs for some more years, he said

While education level has gone up among the young, this is not producing the right kind of skills which are demanded by the modern industry, Kundu pointed out.

However, he hoped that in a decade or so, India will have a much more skilled young population which will pull down the unemployment rate among them. 

Bank of Baroda chief economist Madan Sabnavis said, “We are not able to create productive jobs. While it is better to be a blue-collar worker than being unemployed, buoyancy in the economy would create (more) white-collar workers.”

According to the  United Nations Population Fund’s State of the World Population Report 2023, India has the largest youth population with around 254 million in the 15-24 year age bracket in 2023.