India's young workforce is growing and getting more educated: State of Working India 2026 report
Mar 17, 2026
New Delhi [India], March 17 : India's young workforce is becoming more educated, even as challenges persist in their transition into employment, according to Azim Premji University's State of Working India 2026 report released on Tuesday.
The report said India has expanded access to higher education over the past four decades, alongside a shift of young workers from agriculture to industry and services and a reduction in gender- and caste-based disparities.
It cautioned, however, that the extent to which this increasingly educated and aspirational population is absorbed into the labour market will determine whether the demographic dividend translates into economic gains. India's working-age population share is expected to begin declining after 2030, making job creation critical.
"More young people today are educated, informed, and ambitious than ever before. These are real achievements of which we can be proud," noted Indu Prasad, President, Azim Premji Universities.
The report draws on official databases going back four decades to see how youth participation in education and employment has changed, how well we have been able to use this demographic dividend, and the challenges and opportunities that arise in integrating them into the workforce.
According to Rosa Abraham, lead author of the report and Associate Professor of Economics at Azim Premji University said, the study examines the journey of young people from education to employment over four decades to better understand policy challenges.
The report found that youth educational attainment has risen significantly, with India's tertiary enrolment rate at 28 per cent. However, the share of young men in education declined from 38 per cent in 2017 to 34 per cent in 2024, partly due to income pressures.
While the number of colleges has increased, largely driven by private institutions, regional disparities and teacher shortages persist, with student-teacher ratios exceeding recommended norms in many institutions.
Graduate unemployment remains a concern, at nearly 40 per cent among those aged 15-25 and 20 per cent among those aged 25-29, with only a small share securing stable salaried jobs within a year.
Despite this, graduates earn about twice as much as non-graduates at the entry level, though wage growth for young men has slowed since 2011.
The report also noted increased migration and a gradual decline in caste- and gender-based occupational segregation.
