Context: Examining the unemployment situation in key Indian states by utilizing data sourced from the Periodic Labour Force Survey (PLFS) conducted in the fiscal year 2022-23.
Insights from ILO and IHD Report
- A recent joint report by the International Labour Organization (ILO) and the Institute for Human Development (IHD) uncovered that two-thirds of unemployed individuals were young graduates, signaling a pressing need for immediate policy action.
Unemployment Rates Across States
- Goa: Registers the highest unemployment rate, nearly 10%, with Kerala, Haryana, and Punjab closely following suit.
- Economic Status Impact: Surprisingly, these states are relatively affluent.
- Western States: Maharashtra and Gujarat, economically robust states in western India, exhibit unemployment rates below the national average.
- Regional Disparities: Northern states (J&K, Punjab, Haryana, Uttarakhand, and Himachal Pradesh) and most southern states (excluding Karnataka) report unemployment rates surpassing the national average.
Labor Force Composition
- States with a higher proportion of the labor force engaged in self-employment, predominantly informal, tend to exhibit lower unemployment rates.
- Conversely, states with a greater urban labor force share tend to experience higher rates of unemployment.
- Highly urbanized states often have a reduced agrarian sector, resulting in fewer informal job opportunities.
Education and Unemployment
- There is a positive correlation between the percentage of graduates in the labor force and unemployment rates.
- Example: Kerala, renowned for its highly educated workforce, contends with elevated unemployment levels.
- Despite their affluence and urbanization, states like Gujarat and Maharashtra maintain lower unemployment rates due to a smaller proportion of graduates within their labor force.
Causes of Graduate Unemployment
- Skills Mismatch: Graduates may face unemployment due to a lack of skills suited for the contemporary job market, emphasizing the necessity for enhanced educational standards.
- Preference for Formal Employment: Graduates often pursue higher-paying jobs aligned with their qualifications rather than informal work opportunitie.
- Impact of Sectoral Growth Insufficient expansion of the modern sector can contribute to unemployment among graduates.
Key Insights
- Structural Changes: Shifts such as decreased reliance on agriculture, increased urbanization, and higher education levels can escalate unemployment rates.
- Policy Emphasis: Efforts should concentrate on generating employment opportunities to counteract these trends.
