India’s young and able are not even trying to look for jobs

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Unemployed young people in India are not looking for jobs.

In January 2017, there were 408.4 million employed people in the country, while 25.9 million were unemployed and seeking jobs. By the end of July, the number of employed had fallen to 405.4 million and the count of those looking for jobs declined to 13.7 million, shows a report by the Centre for Monitoring Indian Economy (CMIE), a think tank that tracks business and economic data.

The data also shows that the youth are moving out of India’s labour force. “It is the young who are losing jobs and it is the young again, who have stopped looking for jobs although they are unemployed,” writes Mahesh Vyas, the CEO of CMIE. The study defines people aged between 15 and 24 years. This trend is particularly worrisome as the country has one of the world’s biggest youth populations.

While Vyas says that rigorous academic research is needed to figure out the reasons behind this decline, he does offer a few observations. “Young people faced with fewer jobs or less-paying jobs may just decide to pursue higher education instead of looking for presumably non-existent jobs,” he writes in his report. “Possibly, the youth are enrolling themselves into the various skilling programs being promoted by the government.”

This phenomenon usually plays out in developed countries: When faced with a shortage of jobs, individuals decide to re-skill themselves to improve their chances.

Another reason for what’s happening in India could be the rise of an entrepreneurial culture. “There has been a sharp increase in the number of young people looking to open their own businesses and becoming entrepreneurs rather than getting into the job market,” said Shiv Agrawal, managing director of recruitment firm ABC Consultants.

But if these youngsters are not using their time gainfully in educational activities, then it could spell trouble for India, writes Vyas. “Such youngsters, who have no jobs and have even stopped looking for jobs, could easily stray into unlawful activities. The demographic dividend can become a demographic demon,” he writes.