Over 50% of young graduates in low-skill jobs: Here's why degrees aren't paying off

A college degree is supposed to open doors to better jobs. But for more than half of India's employed young graduates, the reality looks different. A new Economic Advisory Council to the Prime Minister paper highlights the growing mismatch between higher education and the kind of work young Indians eventually find.A college degree is supposed to open doors to better jobs. But for more than half of India's employed young graduates, the reality looks different. New Delhi,Nov 7, 2026 13:00 ISTA college degree is often seen as the ticket to a better job, a stable income and a more secure future. But for a large section of India's young workforce, completing graduation has not necessarily translated into the kind of employment they expected.More than half of India's employed young graduates were working in occupations classified as low-skill in 2022, pointing to a growing gap between educational qualifications and the jobs available to young people.The finding has been highlighted in a working paper by the Economic Advisory Council to the Prime Minister (EAC-PM), titled How India is Transforming Educational Capacity under the New Education Policy 2020: School Networks, Higher Education and Pathways to Work.The paper is authored by Soumya Kanti Ghosh, Member of the EAC-PM and Group Chief Economic Adviser at the State Bank of India, and Shashidharan Sharma, an economist at SBI. Citing the India Employment Report 2024, published by the International Labour Organization (ILO) and the Institute for Human Development (IHD), the authors note that 52.8% of employed young people with graduate degrees were in low-skill occupations in 2022.In other words, having a degree has not guaranteed that young workers will find jobs that match their educational qualifications.A DEGREE DOES NOT ALWAYS MEAN A SKILLED JOBThe employment mismatch becomes clearer when the figures are compared over time.The India Employment Report data cited in the discussion show that the share of employed young graduates in low-skill occupations increased from 44.5% in 2005 to 45.6% in 2019 and 52.8% in 2022.YearYoung graduates in low-skill occupations200544.5%201945.6%202252.8%The gender-wise figures also reveal a difference in employment outcomes. In 2022, 58.4% of young male graduates were working in low-skill occupations, compared with 36.8% of young female graduates.Among young people with postgraduate qualifications, the proportion in low-skill occupations was lower, at 27.2% overall.Education level and genderLow-skill occupations in 2022Male graduates58.4%Female graduates36.8%All graduates52.8%All postgraduates27.2%The authors caution against interpreting the numbers as proof that degrees have lost their value. Instead, they point to uneven returns from higher education, which increasingly depend on the institution, programme, field of study, internships, work experience and professional networks.A SALARIED JOB, BUT IS IT A FORMAL ONE?The problem is not limited to the level of skills required at work. The nature of employment also matters.According to the figures cited in the paper, 57.8% of employed young people with a graduate degree or higher were in regular salaried employment in 2022. However, only 36.1% were in formal employment.The difference is important. A regular salaried job does not automatically come with the protections associated with formal employment, such as social security benefits.Employment indicator among young people with graduate or higher qualificationsShare in 2022Regular salaried employment57.8%Formal employment36.1%WHY MORE DEGREES ARE NOT SOLVING THE PROBLEMIndia's higher education system has expanded considerably over the past decade. Enrolment increased by 31.5%, from 3.42 crore students in 2014-15 to 4.50 crore in 2023-24.But the growth in the number of degree holders has not been matched by equally strong pathways into skilled employment.One reason highlighted by the authors is the limited reach of vocational and technical education.According to the Periodic Labour Force Survey (PLFS) 2025, only 5% of people aged 15–29 had received formal vocational or technical training.This leaves a large section of young people following the conventional academic route, even when alternative pathways could provide more direct preparation for specific occupations.The paper describes this situation as 'qualification congestion'. Families continue to see academic degrees as the safest route to social and economic mobility, while employers increasingly look beyond the degree itself when choosing candidates.The authors explain that vocational routes have historically offered weaker recognition, uneven employer participation and uncertain opportunities to progress into higher education.As a result, students continue to compete for conventional degrees, while employers differentiate between graduates on the basis of their institution, subject, practical experience, internships and other indicators of job readiness.WHAT NEEDS TO CHANGE IN INDIA'S JOB MARKET?The paper argues that expanding college enrolment alone cannot address the problem. The focus must also shift towards the quality of education and how effectively it prepares students for employment.It calls for stronger links between academic education, vocational training and industry requirements. Vocational qualifications should be recognised across institutions, allowing students to move between skill-based courses and conventional higher education without losing their earlier credits.The authors also emphasise the importance of credible apprenticeships, recognition of prior learning and qualifications that remain valuable beyond a particular employer.Employers, meanwhile, need to play a greater role in curriculum design, workplace training and the assessment of practical skills.The larger concern is that India is producing more graduates, but the transition from classrooms to skilled jobs remains uneven.For young Indians, the question is no longer just whether they can earn a degree. It is whether that degree can help them secure work that actually uses what they have learnt.- Ends