India’s classrooms are filling up at an unprecedented pace, but a growing number of young people—especially men—are being forced to leave education early, caught between rising costs and the urgent need to earn. The result is a widening gap between aspirations and opportunities, raising fresh concerns about whether education alone can secure a stable future for the country’s youth.
The latest State of Working India 2026 by Azim Premji University paints a mixed picture of this transformation. While access to education has expanded dramatically over the past four decades, participation patterns are shifting in worrying ways—particularly among young men.
Despite rising enrolment overall, the share of young men in education has fallen from 38% in 2017 to 34% in the last quarter of 2024. A growing number cite financial compulsion as the primary reason for dropping out. “When asked why they are not enrolled in education, an increasing share of young men report the need to support household incomes,” the report notes.
Number of higher education institutions surge
This trend comes even as the number of higher education institutions has surged—from 1,644 colleges and universities to 69,534 today, according to AISHE data cited in the report. “The majority—around 80%—of higher education institutions are now privately run, marking a sharp shift from the 1950s to 1980s, when public and private institutions had nearly equal shares,” it observes.
Access, however, has not translated into equity. The rising cost of education—especially for professional degrees—has widened divides. “Youth from richer households are far more likely to be enrolled in professional courses like engineering and medicine, which are also higher-earning pathways with more stable employment outcomes,” the report says. “Conversely, youth from poorer households are far more likely to be in commerce and humanities.”
Number of Industrial Training Institutes surge?
The expansion of vocational training shows a similar pattern. The number of Industrial Training Institutes (ITIs) has increased nearly 300% over the past two decades, from 3,674 in 2005 to 14,582 in 2025, largely driven by private providers. But this growth has come at a cost. “Based on indicators such as enrolment, pass percentage and trade diversity, ITI quality rankings have deteriorated over time, with newer institutes performing relatively worse,” the report notes.
Even within higher education, capacity constraints are evident. College availability has improved—from 29 institutions per lakh youth in 2010 to 45 in 2021—but faculty strength has not kept pace. Student-teacher ratios in many institutions exceed recommended norms, particularly in public colleges.
The education story is also closely tied to shifts in the labour market. Young workers are moving out of agriculture faster than older cohorts, signalling structural transformation. However, this transition is uneven. While the share of young men in agriculture has declined sharply, women—both young and old—are increasingly concentrated in the sector.
At the same time, traditionally female-dominated sectors such as health and education are seeing lower entry of young women, even as services and apparel manufacturing absorb more female workers.
Earnings data underscores the changing dynamics. The wage gap between graduates and non-graduates widened significantly between 2004 and 2011, reflecting the premium on higher education. But since 2017, earnings growth for young men has slowed, raising concerns about job quality. Notably, the gender gap in graduate earnings has narrowed, with young women earning on par with men by 2023.
“The extent to which this large, increasingly educated and aspirational cohort is absorbed into the labour market will determine whether India’s demographic dividend translates into an economic dividend,” the report concludes.