Degrees without destinations

India’s higher education story has reached an important milestone. The latest All India Survey on Higher Education reports that enrolment has crossed 45 million students for the first time. Women now constitute nearly half of all students, while SC, ST, and OBC students have risen in numbers too. Few public policies have transformed our society as quietly or profoundly as the expansion of access to higher studies.

Yet, another official data set released almost simultaneously tells a different story. According to the latest Periodic Labour Force Survey (2025), nearly one in four Indians aged 15 to 29 years is not in education, employment, or training (NEET). Nearly 96 million young people are not in both classrooms and workplaces. These two statistics, often discussed separately, should be read together.

For decades, public policy has rested on a simple proposition — expand education, improve human capital, and employment will follow. That logic has shaped the growth of universities, scholarship programmes, reservations, and skill development initiatives. It remains central to India’s demographic dividend narrative.

But a demographic dividend is not created when more young people enter universities. It is created when they move to productive work. That transition has become India’s weakest institutional link. The NEET population illustrates why. Unlike conventional unemployment data, NEET captures young people disconnected from both education and work. Some are discouraged from seeking employment. Others face social barriers, lack employable opportunities, or remain trapped between education and labour markets. It measures something broader than unemployment. It reflects the effectiveness of institutions that connect education to economic participation.

Our analysis of the latest PLFS microdata suggests this transition is neither accidental nor evenly distributed. Gender remains the strongest fault line. Even after controlling for education, age, social group, religion, marital status, place of residence, and state characteristics, young women are significantly likelier to be a part of the NEET group than young men. Marriage increases the probability of labour market withdrawal, indicating that educational expansion alone can’t overcome unpaid care responsibilities, restrictive social norms, or workplaces that remain poorly designed for women’s continued participation.

Higher educational consistently reduces the likelihood of NEET. But education is no longer sufficient. Even among graduates, labour market absorption remains uneven.

States with similar educational achievements often display very different NEET rates. Industrial structure, urbanisation, labour demand, and local employment ecosystems shape transition outcomes as much as educational attainment itself.

This exposes a deeper weakness in our policy architecture. Higher education policy measures enrolment, graduation, and institutional rankings. Labour policy tracks unemployment and labour force participation. Skill development programmes monitor training numbers and certification. Yet no institution is explicitly responsible for ensuring young people successfully move from education into employment.

Universities should increasingly be evaluated not only by enrolment and research output but also by graduate employment outcomes, apprenticeship participation, and employer partnerships. Apprenticeships must become a mainstream component of higher education. District-level labour market intelligence should inform curriculum design so that educational institutions respond to changing local demand.

The logic applies to women. Affordable childcare, safe public transport, flexible work arrangements, and stronger incentives for employers to retain young women after marriage aren’t merely social welfare interventions; they are labour market interventions that determine whether education investments generate economic returns.

Finally, India’s statistical architecture should evolve with its labour market. The NEET indicator deserves the same policy attention as unemployment, labour force participation, and quality of employment because it captures the institutional space where India’s demographic dividend will ultimately be won or lost. Until India builds stronger bridges between degrees and economic opportunity, educational success and youth exclusion will continue to grow together.

Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.