Bridging India’s Education-to-Employment Gap: Insights from PLFS Data 

India has made remarkable strides in expanding access to education over the past decade. Primary enrolment is near universal. Secondary and higher education levels have grown steadily, year on year, across rural and urban populations. These are real achievements, reflecting genuine public investment in educational access. 

But they raise an equally important question. What happens after the classroom? Are India’s increasingly educated young people finding work? And is that work good, stable, and commensurate with their qualifications? The latest Periodic Labour Force Survey (PLFS) 2025 data suggest the answer is more complicated than the education numbers imply. 

Rising education accessibility

Between 2022 and 2025, the share of youth (aged 15-29) with secondary or above education rose from 56.5 percent to 62.6 percent. The most significant improvements came from rural gains. Rural females historically lagged their male counterparts but they have been narrowing that gap. Rural female youth saw their secondary attainment share rise from 48.6 percent to 56.3 percent. By contrast, rural male youth saw a slightly more modest increase from 54.1 percent to 59.5 percent. Urban male and female populations, which have historically led on educational attainment saw more modest gains over the same period relative to rural populations. Rural gains are driving the overall national improvement. 

Figure 1: Percentage of youth (15-29) with secondary and above education level  

Figure 2: Percentage of youth (15-29) with secondary and above education level

Education access alone does not tell us whether young people are finding productive work. When we look at what happens when educated youth enter the labour market, the picture becomes considerably more challenging. 

The relationship between education and employment is not a simple upward linear one. It follows a U-shape. Often driven by economic necessity, youth with low levels of education enter the workforce early, typically in informal agricultural or manual work. The labour force participation then dips at the secondary and higher-secondary level, where many young people are still in the education system, while others have entered the labour market but are queuing for opportunities that match their qualifications and aspirations. 

The unemployment figures for graduates are concerningly high. Male graduates face an unemployment rate of 19.2 percent, roughly six times the rate among those who have not completed primary school. For female graduates, the figure is even more striking at 29.4 percent. These are not young people who have been disengaged from the labour market. They are actively seeking work.  

The reasons behind this are multiple. In a labour market characterised by widespread informality and underemployment, graduate unemployment partly reflects a rational queuing behaviour — educated youth delay accepting informal or low-productivity work in anticipation of formal employment that offers contracts, paid leave, and social security. Expectation mismatches, sectoral preferences, and the pull of opportunities abroad compound this further.  

At the same time, persistently high graduate unemployment points to a structural problem: the economy is not generating enough formal, quality jobs to absorb its growing educated workforce. The transition from education to employment is shaped by both the choices of young people and the constraints of the labour market they are navigating. 

Figure 3: Youth LFPR by education level (2025) 

Figure 4: Youth Unemployment rate by education level (2025) 

Women and the education-employment gap 

Gender shapes youth labour market outcomes in ways that persist across every dimension of the data. Women’s labour force participation is substantially lower than men’s at every level of education. Even with rising education levels, structural, social, and economic barriers continue to impede women’s entry into employment. 

Labour force participation among female youth is lowest at the secondary education level, where the largest share of youth now sits. The labour force participation for young females with a secondary education is just 18.9 percent, compared to 51.4 percent for males. Even among graduates, at 43.9 percent, female youth labour force participation remains less than half that of their male counterparts at 85.9 percent. Even with low labour force participation, young female graduates face an unemployment rate of 29.4 percent in comparison with 19.2 percent of their male counterparts. The education system is reaching women, but the labour market is not as accessible. 

The NEET population: beyond unemployment 

Standard unemployment figures capture youth who are actively seeking work but cannot find it. A much larger group sits outside employment, education, and training entirely. In 2025, 25 percent of youth were classified as NEET — Not in Education, Employment, or Training. This proportion is higher among the 20 to 29 age group at 31.75 percent, the critical window for the transition from school into work. 

Figure 5: Youth NEET rate by education level (2025) 

Figure 6: Youth NEET rate by age group (2025) 

The NEET picture is overwhelmingly female, but not for the reasons unemployment data would suggest. Among the female NEET youth, 93.4 percent are not actively seeking work at all. They have withdrawn from the labour force, constrained by caregiving responsibilities, social expectations, a lack of safe or suitable work, or the discouragement that comes from repeatedly searching for work and not finding it.  

Nearly half (49.4 percent) of women with graduate and above level education (Diploma or College degree) are NEET. These young women are not counted in unemployment figures. They are simply absent from formal employment landscape. Addressing this requires more than the conventional tools of labour market policy, such as job placement services, skills training programmes, and employment subsidies, which are designed for those already seeking work. They do not reach young women who have stepped back from the search entirely. 

Figure 7: NEET composition – Unemployed versus Not in Labour Force 

Where the transition breaks down and what it means 

Taken together, the PLFS 2025 data on youth education and employment reveal a system under strain. Education is expanding but the pathways from education into productive employment are weak, inconsistent, and deeply unequal. 

At the lower end of the education spectrum, youth find work but in informal, low-wage, and insecure jobs that offer little protection and no path forward. At the higher end, graduate unemployment is rising alongside graduate supply, for reasons that span job shortages, expectation mismatches, and individual circumstances. 

The economy is not creating enough good quality jobs to absorb its growing educated workforce, and the skills that these young people are being trained in do not always match market demand. Expanding education without addressing these two factors is an incomplete strategy. 

This dynamic is further reinforced by geography and gender. Rural youth, and rural female youth in particular, face compounded disadvantages: lower access to quality education, weaker connections to formal labour markets, and stronger social constraints on labour force participation. The national aggregate improvements in educational attainment mask disparities that become pronounced when disaggregated by region and gender. 

Improving employment pathways 

The data show that rising education alone does not guarantee a smoother path into productive employment. Unemployment rises with education. NEET rates among graduates exceed those at lower education levels. Women’s labour force participation remains persistently low even as their educational attainment approaches parity with men. 

Rising unemployment with education does not signal that education leads to poorer outcomes. Rather, it reflects a labour market where more educated youth are willing to wait for work that matches their qualifications, while the labour market continues to be dominated by informal and low-productivity employment that does not meet their aspirations. 

The challenge has shifted. It is no longer just about getting young people into classrooms. It is now about building pathways — through skills, through quality job creation, through change in social norms — that enable educated youth to convert their qualifications into meaningful work.