India’s workforce – The Core IAS

India’s workforce

India’s workforce is ageing: What does it mean?

An ageing workforce basically means that if one looks at all the employed people in India, the share of young people is going down while the share of those closer to 60 years of age is going up.

In CMIE’s data, youth is defined as those belonging to ages above 15 years and below 25 years. Here, the workforce can be divided into three groups:

1> Those aged 15 years or more but less than 30 years,

2> Those aged 30 years or more but less than 45 years, and

3> Those aged 45 years and older.

Why is India’s workforce ageing?

  • Even though its numbers are swelling up, the youth is getting driven out of the job market.
  • The Employment Rate (ER) for any population or age group tells us what proportion of that age group or population is employed. So, if there are 100 people in the ages 15 to 29 and only 10 are employed then the ER would be 10%.
  • Far from keeping pace, the youth of India actually experienced a fall in employment of a whopping 31% in the past seven years.
  • In other words, while seven years ago, 29 of every 100 youth (15 to 30 ages) used to have a job, today that number has fallen to 19 out of every 100.
  • The employment rate has also fallen for the next age category as well, albeit to a lesser extent. Moreover, the employment rates in this age group were much higher to begin with.
  • The age group of 25 to 29 years shows a rising employment rate over the past 7 years. But a look at the absolute numbers explains that the reason for this rise in ER is not that more people in this age group got a job, rather a sharp fall in the total population of this cohort. It is for this very reason that despite a better ER, this cohort is not able to pull up the numbers for the youth (15 to 29 years) category.

The Oldest age workforce

  • The employment rates have declined the least for the oldest age group. Moreover, it is noteworthy that this is the only age group where the absolute number of people with jobs has actually grown. It is another matter that the overall population of this cohort grew by even more and that is why the ER has fallen to some extent.
  • Among the 45 years and above category, the age group of 55-59 years is the one that stands out. Not only is this cohort one of those rare ones that saw an increase in employment rate but is also the one which has registered the maximum increase in the ER over the past 7 years.


  • Even though India has a fast-growing youth population that by itself does not guarantee more jobs for the youth. In fact, India’s workforce is rapidly ageing. That’s because the young are failing to make their mark in the job market and it appears they are increasingly getting elbowed out by the not-so-young Indians.
  • Even if one accounts for the possibility that a lot of young people may be pursuing higher studies, the trend is still stark enough to merit a look by policymakers.
  • There is evidence to suggest that in India’s unemployment is highest for the youth, and often rises with educational attainment.
  • Unless these trends are reversed, India may continue to experience the rather counterintuitive phenomenon of being a youthful country with an ageing workforce.