Just 8.25% Indian Graduates Employed in Jobs Profile Matching Their Qualification

There is a job mismatch as a result of India's growing educational infrastructure. According to recent research, an increasing proportion of graduates are overqualified for their positions, which has an effect on both economic efficiency and career happiness.

Strategy and Competitiveness at Harvard Business School, reported that only 8.25% of Indian graduates have jobs congruent with their qualifications, while more than half have jobs which are less skilled than their qualifications. Policymakers and economists are horrified with the Periodic Labour Force Survey (PLFS) that has found the Indian labour market to be highly distorted, and that around half of graduates are clerks, machine operators and salespeople (Skill Level 2).

These jobs appear in the National Classification of Occupations (NCO) which has skill categories from levels 1-4, and higher educated people should ideally be in positions that are in the same or a higher skilled category than their level of education.

Overqualified and underemployed

In examining the problem of overqualification, we see a concerning trend. For high-skill jobs (Skill Level 4): 

• 63.26% of workers do have the equivalent education

• However, 28.12% are employed in jobs designated as lower skill (4–8) such as clerks or machine operators. 

• It is also worth mentioning that 38.23% of individuals doing Skill Level 4 jobs had graduate level education - indicating that we are creating too many degrees without jobs linked to that demand.

We see a somewhat similar problem at Skill Level 3. Only 8.25% of those with Level 3 education were in the equivalent jobs. Over 50% of the graduates have jobs lower down in the hierarchy (clerical or retail).

Which States Are Most Impacted?

The paper claims that the most urgent issues in resolving this mismatch are in states like Uttar Pradesh, Bihar, Madhya Pradesh, and West Bengal that have sizable youth populations. In the absence of focused intervention, these populous states run the risk of:

• Widespread underemployment

• Brain drain to cities or overseas

• Redundancy of skills in local economies

• Missed chances for industrialization

Leading States by Skill Level 4 Workforce (based on the report's 2023 statistics)

States that lag behind, such as Bihar (0.45%), Jharkhand (0.70%), and Odisha (0.87%), run the risk of being shut out of high-skilled employment markets unless substantial educational reforms are put in place.

India's demographic deadline: is it ready?

With 650 million people under 25, India's demographic dividend is short-lived, according to UNFP 2023 projections. The elderly will outnumber youngsters between the ages of 0 and 15 by 2046, potentially making the present opportunity a burden. For India to be prepared for the workforce by 2047, it must:

• An educational system that is in line with business demands

• To address underqualification, TVET reforms

• State-specific measures in areas with a large population

• Policies in higher education that prioritize gender

If this doesn't happen, the bulk of Indian workers—nearly 90% of them, according to the Skills for the Future report—may continue to be stuck in low-competency positions and be unable to properly support India's economic goals.