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If further proof were needed that Indias so-called demographic dividend isnt turning out quite as planned, a new Gallup survey shows that just 26 per cent of working age Indians held full-time jobs in the first half of 2012.
The survey pours more water on the idea that Indias young population will be a panacea for its economic woes. An estimated 300m young Indians are expected to join the workforce by 2025, but at the current pace, there simply wont be enough jobs in the country to absorb them.
The report notes:
While the working-age population shrinks in advanced countries and neighboring economic powerhouse China, Gallups data reinforce that Indias still burgeoning young population is not used to its economic potential.
As the FTs Rahul Jacob recently reported, manufacturing, which should be the engine of a developing economy, simply isnt creating jobs in India.
According to Jacob:
It turns out that India is not competing with China for manufacturing jobs after all. In the past couple of years, as Chinas wages along the coast where its export industries are concentrated have been rising at about 20 per cent a year, low-end manufacturers have started moving elsewhere. This would seem an ideal time for Indias demographic dividend to be cashed, but the jobs making jeans and shoes are heading instead to Chinas inland provinces, Vietnam, Bangladesh and Indonesia.
One of the main reasons is education, in which India has not invested nearly enough, creating a massive workforce ill-equipped for even low-skilled jobs. But another is labour laws that are much stricter than those in competing developing countries.
Hence, Gallups findings. Workers between the ages of 15 and 30 the very people who are meant to make up Indias demographic advantage over China are five times more likely to remain unemployed than their older counterparts, and twice as likely to be underemployed.
The good news, Gallup says, is that 22 per cent of young Indians working full time have white-collar jobs, making them at least somewhat more likely to have these types of typically higher paying jobs than older generations of workers.
Ultimately, India must jump start job creation in manufacturing, which could be instrumental in reaping this youth demographic dividend, according to Gallup. To do that, the government will have to achieve the goals it set for itself with 2011s National Manufacturing Policy, to create 100m manufacturing jobs in a decade.
The stakes are high, as Gallup notes:
The Gallup findings make clear that the potential payoff for Indias economy would be significant if more Indians and especially more young Indians are able to secure full-time employment. The youth demographic dividend alone, according to an International Monetary Fund report, is expected to contribute two percentage points to Indias annual per-capita income growth in the next 20 years.
Gallup: just 1 in 4 working age Indians employed full time | beyondbrics
The survey pours more water on the idea that Indias young population will be a panacea for its economic woes. An estimated 300m young Indians are expected to join the workforce by 2025, but at the current pace, there simply wont be enough jobs in the country to absorb them.
The report notes:
While the working-age population shrinks in advanced countries and neighboring economic powerhouse China, Gallups data reinforce that Indias still burgeoning young population is not used to its economic potential.
As the FTs Rahul Jacob recently reported, manufacturing, which should be the engine of a developing economy, simply isnt creating jobs in India.
According to Jacob:
It turns out that India is not competing with China for manufacturing jobs after all. In the past couple of years, as Chinas wages along the coast where its export industries are concentrated have been rising at about 20 per cent a year, low-end manufacturers have started moving elsewhere. This would seem an ideal time for Indias demographic dividend to be cashed, but the jobs making jeans and shoes are heading instead to Chinas inland provinces, Vietnam, Bangladesh and Indonesia.
One of the main reasons is education, in which India has not invested nearly enough, creating a massive workforce ill-equipped for even low-skilled jobs. But another is labour laws that are much stricter than those in competing developing countries.
Hence, Gallups findings. Workers between the ages of 15 and 30 the very people who are meant to make up Indias demographic advantage over China are five times more likely to remain unemployed than their older counterparts, and twice as likely to be underemployed.
The good news, Gallup says, is that 22 per cent of young Indians working full time have white-collar jobs, making them at least somewhat more likely to have these types of typically higher paying jobs than older generations of workers.
Ultimately, India must jump start job creation in manufacturing, which could be instrumental in reaping this youth demographic dividend, according to Gallup. To do that, the government will have to achieve the goals it set for itself with 2011s National Manufacturing Policy, to create 100m manufacturing jobs in a decade.
The stakes are high, as Gallup notes:
The Gallup findings make clear that the potential payoff for Indias economy would be significant if more Indians and especially more young Indians are able to secure full-time employment. The youth demographic dividend alone, according to an International Monetary Fund report, is expected to contribute two percentage points to Indias annual per-capita income growth in the next 20 years.
Gallup: just 1 in 4 working age Indians employed full time | beyondbrics
