India has the largest youth population globally. Defined as those aged 15–29, they comprise a third of the country’s working-age population. However, as demonstrated by this new report on the state of India's labor market, their transition from education to employment is still difficult, with opportunities being uneven across regions and social groups.

What is the state of India's labor market? How long should young people study? Which sectors hold promise for them? Where can they access effective education and skill training for the jobs available? And how can they find remunerative work? The State of Working India 2026 report by Azim Premji University breaks down the transition of young workers from education to job searches into employment, and how this has evolved over the last 40 years.

The following are nine interesting findings from the report on the state of India's labor market that help build on what we already know about young people’s employment journey. These include insights on high youth unemployment despite the increasing number of young graduates, how women’s employment has changed over the last four decades, the accessibility of higher education, and the prevalence of caste-based occupations.

The State of India's Labor Market in 2026

1. The Young Population Will Start Declining Soon

India’s demographic dividend is expected to peak in 2030, after which the share of youth in the population will begin to fall and there will be an increase in the number of elderly people.

To understand this in terms of numbers, India has around 367 million young people who are of working age, providing context for the state of India's labor market. Excluding those in education, 263 million young people need meaningful employment for India to maximise its demographic dividend before the window of population growth closes.

2. Higher Education and Vocational Training Institutions Are Growing, But Unequally

Educational enrolment has risen sharply over the past four decades, even as employment has declined. Among men aged 15–19, enrolment increased from 49 percent in 1983–84 to 73 percent in 2023–24. For women, the rise was steeper—from 38 percent in 1983 to 68 percent in 2023.

While India’s progress broadly matches global trends, caste-based inequalities continue to limit fair access to higher education. Between 2011 and 2023, enrolment among Scheduled Castes rose from 11 percent to 26 percent. Among Scheduled Tribes, enrolment increased from 8 percent to 21 percent during the same period. However, these figures still fall below the national average of 28 percent, indicating that entry into education is still unequal.

Read the full article about the state of India's labor market for youth at India Development Review.