Urban India continues to face higher youth unemployment compared to rural areas, even as joblessness among young people has shown a gradual decline in recent years, according to a latest report by SBI Research based on the latest Periodic Labour Force Survey (PLFS) data. 

The report released on Friday said, “The rural–urban pattern shows persistently higher youth unemployment in urban areas, although urban unemployment declined from 16.8% in 2022 to 14.3% in 2024 while rural unemployment remained lower and broadly stable around 8–9%.”  

Urban-rural divide persists 

The findings highlight a structural imbalance in India’s labour market, where cities, despite offering more diverse job opportunities, continue to struggle with absorbing young job seekers. 

Overall, youth unemployment in India has improved modestly, falling from 10.9% in 2022 to 10.3% in 2024, and further to 9.9% in 2025, the report said. This remains lower than the global youth unemployment estimate of 12.6% for 2025, but still reflects ongoing challenges in employment generation for the 15–24 age group. 

The report pointed out that the urban labour market is more sensitive to economic cycles and skill mismatches, which could explain the higher unemployment rates among youth in cities compared to rural areas, where informal and agricultural employment provides a buffer.

Persistent gaps in labour force participation 

Another area of concern is female youth unemployment, which has shown weaker improvement. “Female youth unemployment remains a concern… it rose to 11.1% in 2024 and stands at 11.3% in 2025, suggesting weaker improvement for young women,” the report said. 

Beyond unemployment, the report also flagged persistent gaps in labour force participation. The overall labour force participation rate (LFPR) stood at 59.3% in 2025, largely unchanged from 59.6% in 2024, indicating limited expansion in workforce engagement. 

A sharp gender divide continues, with male LFPR at 79.1% compared to 40% for females. Rural participation remains higher at 62.8% versus 52.2% in urban areas, underlining the continued dependence on rural labour markets. 

As per the report, the data underscores the need for targeted job creation strategies in urban areas, particularly for young and educated workers, alongside measures to improve female workforce participation.