The novel coronavirus has been extremely devastating for India with negative GDP forecast, whooping unemployment, and progress over poverty set to reverse. However, the ill-effects of the pandemic have been essentially skewed against the youth (15-29 years) as they face a trilemma of drastic unemployment, disruption in education, and failing education system. This largely disproportionate economic impact on India’s youth requires a more targeted government approach to not only relieve the youth of the current economic distress but also to avoid a demographic disaster presently facing India.
Prior to the pandemic, Labour Force Participation Rate among the youth was drastically decreasing, falling from 56.4% in 2004-05 to 38.1% in 2018-19. An even more disturbing figure - “Not in Labour Force, Education and Training” (NLET) in India which estimates the number of people who are neither working nor looking for work nor undergoing education or training, accounted for 100.2 million young people in India. This steep figure was despite various government interventions for increasing skilling, entrepreneurship and job creation in the country. To make things worse, through financial and economic crisis of the past, it is clear that youth are exceptionally vulnerable and prone to unemployment during downturns and the covid-19 pandemic is likely to be no exception.
Evidence indicates that unemployment rate among the youth is more sensitive to the business cycle. The current pandemic-induced economic downturn is no different. Young people are more likely to be laid off due to lack of skills and experience. Increasing contractual nature of work has also been endowed upon the younger population relative to their older counterparts, leaving their employment status more fragile. According to a study conducted by the International Labor Organization (ILO), even before the pandemic, younger people were three times more likely to be unemployed and the pandemic has only exacerbated this. Another study by Asian Development Bank (ADB) and ILO estimates that on account of the pandemic 4.1 million jobs pertaining to the youth would be lost in India alone.
The pandemic has also disrupted education of 73% of the global youth around the world, and India, with stark levels of inequality in access to education is set to experience the worst. Young women are particularly vulnerable to this disruption due to increase in the burden of unpaid care work at home. Evidence from the Ebola crisis suggests that this reason contributed to more young girls dropping out of education as compared to boys. With the household incomes being severely depressed due to the crisis, it is highly plausible that young girls and boys, especially in the rural area, would drop out of education to support their families.
Furthermore, the disruption in education becomes even greater due to the problem of digital divide in India. With wide disparities in ownership of smartphones and access to internet, many of India’s students are experiencing a rather long hiatus in their education. While, schools are being opened in some areas, online schooling to prevent large gatherings is mostly prevalent. A recent report by Prof. R.C. Kuhad Committee of the University Grants Commission highlights how the large gaps in India’s current digital infrastructure leaves the country inept at adopting online modes of education.
The digital divide, growth in unpaid care work, and the need to urgently address income losses at home has caused wide spread disruptions in education which is set to severely impact the education of young people, causing long term consequences in terms of rising inequality, low human capital development and further unemployment.
To add to the worrying unemployment and education scenario for the youth, the failure of the multi-state, multi-institutional, multi-board education system to cope with the pandemic is also affecting the to-be graduates. Delayed examination in turn leading to postponement of recruitment of final year students has created an environment of uncertainty and gloom with many even losing their job offers entirely. While this is painful in the short run, it has long term impacts as employment and remuneration are not dependent on education and skills only but also previous employment status of the applicant and break years have the possibility of shifting the entire remuneration curve to a lower base point.
Thus, young people are facing a trilemma – unemployment due to poor job market conditions for the youth; disruption in education due to dropouts and digital divide; and the inability to join the work force due to incessant delay in examinations and provision of degrees. The covid-19 pandemic has not only hindered economic and physical health of the country but has also hindered India’s ability to capitalize on its youth. With time running out and India already moving on its pathway to becoming an ageing country, urgent steps need to be taken to prevent one of the biggest assets – young people, turning into a burden. The latter is likely if we continue treading on the present path of unemployment, indecent jobs and ever-increasing NELT numbers.
The sectors which created the highest number of jobs for the past decade i.e. manufacturing, construction, trade, hotel and transport are most badly hit due to the pandemic. Large public investment and targeted effort especially towards the younger section of population is required to revive these sectors. In order to insulate the youth from severe unemployment, Urban Unemployment Guarantee Scheme, as proposed by Jean Dreze, with special focus on youth employment via provision of “decent work” is crucial.
Additionally, special efforts need to be made to ensure minimal disruption in continued education and to bridge the digital divide. According to a recent survey by the Indian Government’s National Sample Survey Office, less than one-fourth households in the country have access to the internet and this number is suspected to be lesser than one-tenth when it comes to household with students. Several, but not all, state governments have taken steps to meet this issue and prevent dropouts. There is a need for a larger and more holistic action and implementation from the Centre as different states have different capabilities when it comes to meeting the challenge and absence of uniform initiatives from the Centre will lead to regional divides among the youth.
Additionally, focus should be on education that produces not only job seekers but also job creators and sustained emphasis on entrepreneurship should be maintained. A well-functioning skill demand and skill supply matching framework needs to be created through collaboration between the industry and the government.
The World Economic Outlook (October 2020) reports that the pandemic will leave deep scars and slow growth for India in the medium term as labour markets take time to heal, uncertainty and balance sheet problems arrest investments and loss in schooling exacerbates human capital deficit. In such a scenario, India cannot afford to fail its youth. India is already running out of time to make the most out of its demographic dividend necessitating the employment of urgent action. In the absence of proper initiatives and corrective actions in areas of employment and education, it will be staring at a demographic disaster, unable to catch up with contemporaries like East Asian tigers who grew on the shoulders of their youth.
Manan Thakkar is Research Intern at ORF
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