Experts Explain | Demographic Dividend and Unemployment Problems in India, China

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Last March, the World Population Review claimed India’s and China’s populations stood at 1.428 billion and 1.425 billion respectively. The world’s two fastest growing economies are clueless as to how to solve soaring youth unemployment. How do the two nations compare?

A recent Pew survey estimates the current median Indian age at 28, as compared to China’s 39, suggesting India will continue to enjoy its demographic advantage up to the end of this century.

However, experts at home and abroad wonder if India’s demographic dividend may remain an advantage, without education and skilling leading to jobs. In China too, a high level of youth joblessness has generated a great deal of attention and discontent.

What is happening in China?

Let’s first look at China. In March, when the World Population Review announced China’s youth population was declining and the ageing population was rising — coinciding with the annual ritual of ‘Two Sessions’, the country’s lawmakers’ highest-level policymaking meetings — China’s leading semi-independent financial online daily, Caixin Global (March 15, 2023) observed: “In 2023, a record of 11.58 million students in China are expected to graduate from higher education institutions. How will China’s youths cope with the situation, and what measures have the Chinese government put in place to stabilise employment?”

Like the last year, in China, the perennial struggle to find employment after graduation is especially dire this year. It is of crucial import to remember that the hundreds of millions of college and university graduates last year and this year are also the ones forming the first and second cohorts of this century. The irony is, they are China’s “post’00s” generation — those who grew up during the age of most rapid economic growth, and now they are forced to view themselves as the first victims of a pandemic-hit slow economy amid a growing demand for job security.

When these 10-12 million young Chinese entered the job market in March-April last year and this year — in what is known as China’s job season, called sanjinsiyin or “Golden March-Silver April” in Chinese — instead of a decent job they faced a job market hit hard by the Coivd-19 lockdowns and massive layoffs in key sectors such as real estate, tech, and education. (A longer analysis on youth joblessness in China was carried in these columns in April, see IE, 20 April 2023).

Mostly urbanites, who already earned the wrath of the authorities for popularising social media trends such as ‘lying flat’ and ‘involution’ (which are about rejecting the culture of over-working and over-achieving), these Gen-Z fresh graduates were also the ones who launched last year’s anti-Zero Covid protest, the anti-Xi Jinping short-lived yet ‘scary’ urban-based social movement.

What’s the extent of the problem?

Interestingly, as a report in a popular Chinese online journal pointed out, ‘with one out of every five young urbanites without work, China is facing a new kind of epidemic: joblessness’. Today, many Chinese ‘public intellectuals’ are seeing the problem of urban joblessness as actually predating the outbreak of the pandemic. These scholars cite China’s National Bureau of Statistics (NBS), which reported that the official jobless rate for urban youths aged 16 to 24 rose 0.6 percentage points to 19.9% in last July, the highest since the national agency started releasing youth employment data in 2018.

So what has gone wrong in China’s job market? Is it supply-demand contradiction as the country’s growth was hit hard during the Zero-Covid three years? Or is the Covid-19 pandemic just a fig leaf and the real problem is with China’s education sector? Or, as mentioned, finding jobs for educated youth is becoming a perennial crisis — notwithstanding China’s economic growth focus shifting from quantitative to qualitative growth?

These are among the questions that need an answer.

And what is the scene in India?

In India, the China story throws up similarities, plus big differences. India’s challenges: the numbers of school leavers, plus liberal arts graduates from universities and engineers from low-grade colleges who cannot find jobs. And yet, we face a shortage of plumbers, electricians, artisans, bakers, cooks, dental assistants, and all manner of skilled personnel and many hands-on specialties. What went wrong?

For three decades, we paid lip-service to ‘skilling’, but entities such as the National Skill Development Corporation (NSDC), created in 2003, have not delivered. Chasing numbers, NSDC focused on short courses of less than a year’s duration, insufficient for real skill acquisition.

Then, our fine stock of 2,500+ Industrial Training Institutes established after the 1960s are run by state governments. Long moribund, efforts to re-purpose them, with the help of CII and FICCI, bringing in neighbouring industrial enterprises, have mostly failed. States resist transferring full control to their industrial partners. But private skilling institutes have mushroomed, many in the informal sector, partly filling that gap.

Additionally, many engineering colleges mostly function as money-making enterprises, giving inadequate training. On the flip side, huge numbers throng the coaching industry, to compete for exams to the elite IITs and other prestigious technical entities. Those that miss out aim at the fast-expanding venture enterprises in service jobs, including as delivery personnel. Besides, a real shift to skilling needs hard choices in terms of segmenting the school stream, at what used to be called the ‘middle school’ level, when the youth are aged 11 or 12 years.

What about NEP and jobs?

Our NEP 2020 speaks, according to one analyst, of: ‘6th grade, 7th grade, and 8th grade…Here, vocational training is introduced for the students to improve their skills in the particular field.’

If vocational segmentation is to be effective, this has to continue at the secondary level, with vocation-focused schools, different from traditional high schools, designed to produce skilled artisans and specialists – it is not right to call them ‘skilled workers’. China’s vocational education stream is perceived as unattractive, compared with regular schools that lead to academic careers. An identical challenge is likely to face Indian vocational institutions. NEP does not seem to address this.

What is the overall Indian picture? The Indian youth do nothing remotely resembling China’s ‘lie flat’ phenomenon. Hardly anyone wants to opt out. That is a telling comparison; sociologists might reflect on the why. The responses in two large, populous countries are very different.

How do the jobless Indian youth react? They chase varied options. One is ‘undocumented migration’, the dream of prosperous foreign lands. India is now a major source of UK’s ‘boat people’. On the Canada-US land border, high numbers of detainees come from India, as do those tackling the US-Mexico border. Other targets: the Gulf region, Europe, Africa and unexpected places, like Malta and Japan. Recently, we saw Indians in the thousands returning from a conflict zone Sudan.

Many seem to turn to crime, and India has become a hub for internet-based scams, many with international reach.

What are the solutions?

In sum, what do India and China need? 1. Job creation is the topmost priority. 2. Skilling, to effective outcome levels, should be our constant goal. 3. The NEP vision of segmentation at the middle school level should lead to a different kind of high schools that continue with skilling training. In China, with rise in middle-income population in urban households, both at the middle-/high-school level, rural background teenagers and youths are forced (as they are unable to meet increasingly high costs of education) to enrol into vocational schools – just like the “poor” ITI’s in India. 4. MSMEs are likely to be the major employment creators. 5. IT capabilities are India’s innate asset; we must valorise that. But don’t neglect the manufacturing sector.

This entails giving respect to such specialisations – the best model for this is Germany, emulated by many countries in Europe and beyond, Singapore, and to a lesser extent, China. And China? Their Achilles heel are the 60 million ‘left behind’ children, stuck in low grade rural schools, under the inequities of the ‘residence permit’ (hukou) system, that does not allow them to live in cities (NYT, 4 Sept 2014), though some restrictions have now eased.

Source: Indian Express