Employment Status and Wage Gap of Youth Engaged in Decent vs Non-Decent work in India

Abstract: Between 2017–18 and 2023–24, the youth workforce participation rate (WPR) in India increased significantly, accompanied by a substantial decline in the unemployment rate. Over the same periods, the proportion of young individuals engaged in regular wage and salaried employment (RWSE) was consistently higher than that of the overall working-age population. Indicators of decent work, such as access to written contracts, paid leave, and social security coverage, show notable improvements, pointing to the gradual formalisation of youth employment and the expansion of labour market protections. These trends collectively suggest that, alongside rising participation, the overall quality of employment opportunities available to youth has improved over time. The primary objective of this study is to examine the employment status of young people and analyse wage disparities between decent and non-decent workers. In addition, the study evaluates the wage penalty associated with participation in non-decent work activities, thereby contributing to a more profound understanding of labour market inequality. The findings reveal that the wage penalty for non-decent employment is not evenly distributed across the wage spectrum; rather, it is more pronounced at the lowest and highest wage quantiles. The study also found that the magnitude of this penalty has declined over time, suggesting gradual improvements in the relative position of non-decent workers.

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