India's youth studying more, job challenges remain, says Azim Premji University's State of Working India 2026 report

India’s 15 to 29 year olds are increasingly accessing higher education, ensuring a movement out of agriculture into industry and services, and reduced gender and caste-based disparities, says the annual ‘State of Working India 2026’ report published by Azim Premji University.

However, challenges remain and the extent to which the large, increasingly educated, and aspirational cohort is absorbed into the labour market will determine whether India’s demographic dividend (which is nearing peak) translates into an economic dividend, it said.

India’s working-age population share is expected to begin to decline after 2030. The report suggests that hence the pace of job creation in the coming decades is critical to ensure that the demographic dividend translates into an economic one.

“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.

According to the report, youth education levels have increased significantly over four decades, especially among women. India’s tertiary enrolment rate (28%) is comparable to countries with similar per capita incomes, it says. The report also points out that the share of young men in education fell from 38% in 2017 to 34% in late 2024, with a large share citing the need to support household incomes as reason for their withdrawal.

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.

Difficult education-to-employment transition is one of the key challenges identified in the report. “Graduate unemployment among the 15- to 29-year-olds remains high – nearly 40% among the 15- to 25-year-olds, and 20% among the 25- to 29-year-olds; and, only a small share secure stable salaried jobs within a year of graduation”, it said.

“The report traces the journey of a young worker - from education to job search and employment, and how this transition has evolved over the last forty years. We hope the report will lay out some of the foundational work that will contribute to a better understanding of the challenges in this transition and enable coordinated policymaking”, Rosa Abraham, lead author of the report and Associate Professor of Economics at Azim Premji University said.

The report notes that college availability increased from 29 per lakh youth (2010) to 45 (2021), mainly driven by private institutions. However, faculty growth has not matched rising student numbers. As against AICTE norms of 15–20 students per teacher, private colleges average 28 and public colleges 47, the report said.

While the number of Industrial Training Institutes (ITIs) has grown by nearly 300% since the 2010s, largely due to private providers, institutional quality, especially among private ITIs, has fallen, it highlights.