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No Demand for Skill: The Bane of India’s Vocational Training

Author

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  • Nishant Chadha
  • Shubhashis Gangopadhyay
  • Bhupesh Yadav

Abstract

In this article, we document some empirical facts about vocational training in India. First, we show that the education levels and vocational training of the Indian labour force are low and have not changed between 2004–2005 and 2011–2012. Then, we show that in wage employment, regular wage and salary earners and casual labour, the returns to skilling are low while the returns to general education are significant, even within the same occupation and industry category. Using the enterprise surveys from the NSS, we also document that self-employment, which is the outside option for most unskilled, semi-skilled and even skilled people, is very unproductive. We, thus, argue that the Indian labour market is stuck in an equilibrium where both the number of persons getting skilled and the returns to skilling are low. JEL: J240, O150

Suggested Citation

  • Nishant Chadha & Shubhashis Gangopadhyay & Bhupesh Yadav, 2018. "No Demand for Skill: The Bane of India’s Vocational Training," Review of Market Integration, India Development Foundation, vol. 10(2), pages 120-137, August.
    • Handle: RePEc:sae:revmar:v:10:y:2018:i:2:p:120-137
    DOI: 10.1177/0974929218778947
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