How unemployment rate varies across level of education?

The recently released Annual Periodic labour force Survey (PLFS) report 2017-18, shows that the usual status unemployment rate is 5.8 per cent among males and 3.8 per cent among females in rural areas, while the rates are 7.1 per cent among males and 10.8 per cent among females in urban areas. Let us look into how the unemployment rate varies across the level of education and how this is comparable to the earlier years.

The unemployment rate has increased for people with all education level in 2017-18 as compared to the previous years for rural males. But the rise has been more steeper for people with middle and secondary & above levels of education. The trend across different education levels has remained same over the years with the lowest unemployment rate for illiterate people and the highest for the people with secondary and higher education level.

The unemployment rate for illiterate rural women has shown a decline in 2017-18 as compared to previous survey (2011-12). While the unemployment rate increased for rural females with upto primary level of education and for females attaining middle level of education in 2017-18 as compared to 2011-12, but that was less than 2004-05 levels. But for rural females with secondary and higher level of education the unemployment rate has been the highest in 2017-18 compared to all previous surveys.

Same as their rural counterparts, the unemployment rate for urban males increased sharply in the latest survey compared to the earlier years. The rate increased by over 100% compared to the previous survey. Here also the unemployment rate for males with secondary & above level of education is as high as 9.2% as per the latest survey.

The unemployment rate for urban females also increased in 2017-18 as compared to 2011-12. While the unemployment rate for urban females with primary and middle levels of education was more in 2004-05 as compared to 2017-18, the unemployment rate for urban females with secondary & above level of education almost doubled in 2017-18 compared to 2011-12.

So it can be inferred that the unemployment rate for people with secondary & above has shown a substantial increase for male and female in both rural and urban India in the latest survey. When one delves deeper it is seen that the unemployment rate for secondary and higher secondary level of education is lower than that with higher level of education

The unemployment level for rural male with diploma or certificate holders has been as high as 26.3%. The unemployment rate for Graduate and Post Graduate rural females are as high as 32.7% and 36.8%. The same for urban females are 24.4% and 19.5% respectively.

The question that comes up why the unemployment rate is so high for educated people? There can possibly be two probable situations:

  1. There is lack of job opportunities for educated people across the country
  2. The educated people are unemployable and needs more relevant skill sets for the job opportunities that are available.

It can be any of the above two possibilities or it can be a combination of both. If it is the former then there is a need to focus on creating optimal job opportunities for educated persons. If it the later then a serious focus needs to be given on the higher and technical education policy. More focus needs to be given on courses providing right skill level required for the job market.

The task is cut out for the newly formed Cabinet Committee on Employment and Skill Development. The strategies of the cabinet committee needs to be in sync with the new education policy. The draft education policy proposes several new policy initiatives for promoting internationalization of higher education, strengthening quality open and distance learning, technology integration at all levels of education. Special focus on higher education is the need of the hour. Also more job opportunities with skill set level available in the country needs to be created.

IPD sincerely hopes that this committee considers and tackles the grim employment scenario for people with higher education level. This is extremely crucial for sustainable growth of India. If the unemployment rate remains as high as it is now for people with high level of education, this might have a detrimental impact on the GDP growth of the country.

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