Employment Vulnerability Among Young Indian Workers

We examine the labour market vulnerability faced by Indian youth using high-frequency panel data from the Consumer Pyramid Households Survey conducted by CMIE. Our analysis demonstrates that youth are severely vulnerable to frequent job loss, leading them to become unemployed or leave the labour market. Even if they remain employed, they are susceptible to downward mobility in job quality. Using multinomial logit regression, we examine the impact of several socioeconomic and demographic characteristics that may impact young people’s labour market vulnerability and, in turn, their earning potential and household well-being. Empirical findings suggest widespread prevalence of labour market vulnerability among Indian youth. However, there is a considerable heterogeneity in it, with youth from rural backgrounds, females, and those from lower socioeconomic strata being more exposed to income and employment vulnerability. Additionally, young people with lower education who joined the workforce at an early age are more likely to hold precarious jobs and earn lower wages. Similarly, youth from large households with many dependents and less education are more vulnerable in the job market. Our observations underscore the need for policies to enhance labour market opportunities for the youth and reduce their vulnerability to job loss and downward income and employment mobility.