India’s young population is more educated than ever. But finding a job after graduation is getting harder.
A new report by Azim Premji University shows a clear shift. More young people are entering higher education. But job creation is not keeping pace, according to the State of Working India 2026 report
More Graduates Than Ever
India has seen a sharp rise in the number of graduates over the past two decades.
In 2004, only 10% of young people were graduates. By 2023, that share rose to 28%, according to the report
In absolute numbers:
6.3 crore graduates in 2023
Up from 1.9 crore in 2004
Access to higher education has expanded significantly across the country, the report notes.
Unemployment Is Highest Among Graduates
The data reveals a striking trend.
Graduates now form the largest share of unemployed youth.
67% of unemployed youth in 2023 are graduates
Up from 32% in 2004
Around 1.1 crore unemployed graduates
Graduate unemployment remains high, especially among younger age groups, according to the report.
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Jobs Are Not Keeping Up
The gap between education and employment is widening.
Between 2004 and 2023:
Around 50 lakh graduates were added every year
Only 28 lakh graduate jobs were created annually
Of these, about 17 lakh were salaried roles
Graduate employment has not kept pace with the rise in graduates, the report states.
Why This Gap Exists
The report highlights multiple factors behind this mismatch.
Skill Mismatch: Some graduates do not have the skills required for available jobs, according to the report.
Limited Work Experience: Entry-level roles often demand experience, making it harder for fresh graduates, the report notes.
Delayed Job Entry: More young people are able to wait before taking up jobs, including those from lower-income households, according to the report.
Graduate Earnings Are Slowing
Graduates still earn more than non-graduates at the start of their careers.
But that advantage is shrinking.
Earnings growth for young male graduates has slowed since 2017
The wage gap between graduates and non-graduates is narrowing
At the same time, graduates continue to earn more over the long term, with roughly double entry-level earnings, according to the report
Cost Of Education Remains A Barrier
Higher education has expanded. But access is still uneven.
Professional degrees such as engineering and medicine remain expensive.
For many families, the cost can exceed annual household spending.
This continues to limit participation from poorer households, even though access has improved over time, the report states.
Fewer Young Men In Education
Another shift is visible in enrolment trends.
The share of young men in education fell from 38% in 2017 to 34% in 2024
Many left education to support household income
This reflects financial pressures within households, according to the report.
