Engineers in India — Separating Fact from Fiction
Introduction
The state of India’s higher education in engineering, and the job market outcomes for engineers has been an object of great public interest. However, much of the analysis on the job market outcomes of engineers in India is anecdotal or based on small surveys.
For example, Prof. V. Kamakoti (Director of Indian Institute of Technology, Madras) recently expressed his concern over engineers pursuing careers in non-core fields such as management consulting and finance. Prof. Kamakoti’s worry stemmed from his interactions with the institution’s alumni. This could certainly be true for IIT-Madras, but are engineers in India (at large) pursuing careers outside core engineering fields? This is a question that remains to be answered.
Likewise, there have been several concerns raised in public fora about the unemployment levels among engineering graduates in India (an example). Again, there is very limited empirical backing (based on sizable and nationally representative data) for such concerns. In this article, I leverage the newly released data from the Periodic Labour Force Survey (PLFS) of India for 2021–2022 (July 2021 to June 2022, to be precise). The PLFS is a nationally representative survey (barring a few remote villages of Andaman and Nicobar Islands) that provides key insights on India’s workforce.
Understanding the Number of Engineers in India
As a first step, I explore the number of engineers in India (per 1,000 population). At the national level, there are 7.6 engineering graduates¹ per 1,000 population. However, there is substantial variation across India, ranging from Puducherry and Tamil Nadu at 35.7 and 25.3 respectively to Ladakh and Mizoram at 0.4 and 0.38 respectively.
South India’s obsession with engineering degrees is clearly evident from the data (specifically in the states of Tamil Nadu and Andhra Pradesh). There are several socio-economic factors behind this obsession. These require a study of their own.
Next, we look at what share of engineering graduates participate in the labour force (i.e., are employed or are searching for employment).² Across India, around 83% of engineering graduates participate in the labour force. However, the participation rates are very different between men and women. The participation rate is around 90.6% for men and just 61.3% for women.
It is important to note that there is considerable variation in the participation rates across the states (see Figures 3 and 4).
A similar stark difference between the genders is also seen among the number of engineers. For example, Kerala has a male to female engineers ratio of 1.57:1, while Uttar Pradesh has a ratio of 13.76:1. Again, there are several social, economic, and cultural aspects that affect these numbers, which are far outside the scope of this particular article.
The low participation rate among women is definitely a cause for concern. One could argue that women are more likely to pursue higher education, and hence do not participate in the labour force. To test this, I delve a little deeper, to understand the major reason behind women engineering graduates not participating in the labour force. To this end, I quantify the share of those engaged in domestic duties, among women with engineering degrees that are not participating in the labour force. Overall, across India, the share is 87% (i.e., for every 100 women engineering graduates that are not participating in the labour force, 87 are primarily involved in taking care of domestic duties).
Again there is substantial variation among states. Irrespective, the numbers are still on the higher side across all states. This is a rather worrying number, which requires urgent attention.
Understanding the Unemployment Rate among Engineers
Now that we have explored the number and concentration of engineers across India, the next step is to look at the share that are unemployed.
Across India, the unemployment rate among engineering graduates is at 20.5%. This is quite a high rate. To put it in perspective, the overall unemployment rate in India was just 4.75% in this period. However, like in the case of the other metrics, there is substantial variation among states with Rajasthan and Kerala at 37.8% and 35.2% respectively on the one end, and Karnataka and Gujarat at 14.1% and 5.4% respectively on the other end.
The high unemployment rates in several states bolsters the argument about the unemployability of engineering graduates in India.
What sectors are Engineering Graduates Employed In?
The natural next step is to see the outcomes of the engineering graduates that are currently employed. Are they working in fields related to engineering, or are they forced to take non-core engineering jobs?
Around 35.2% of engineering graduates are employed in ‘Computer Programming and Consultancy’ (National Industrial Classification 2008 Code: 620), followed by about 5% in ‘Software Publishing’ (National Industrial Classification 2008 Code: 582). Hence around 40% of engineering graduates that are employed are in the information technology domain.
The top 15 sectors of employment for engineering graduates are summarized in Figure 7. These sectors in Figure 7 account for 66.5% of the employment. Among the top 15, non-core industries such as Retail Sales, Monetary Intermediation / Financial Services, Public Administration, and Growing of Non-Perennial Crops account for 12.6%.
From the data it is evident that Prof. Kamakoti’s concern is not just applicable for IIT-M, but is applicable nationally, given the prominence of non-core job outcomes.
Earnings Outcomes — Why Engineering Degrees are still attractive
Despite all the shortcomings, anecdotally, one finds engineering to still be a prominent choice. I try to explore the reason behind this.
Graduates with engineering degrees earn substantially higher on average than the rest of graduates (Figures 8, 9, and 10). While, it would be fallacious to infer that the increased pay is completely due to the engineering degree,³ many look at simple outcomes such as average wage levels to determine their career choices. Hence, the higher wages levels still attract many to engineering disciplines.
Conclusion
Objectively speaking, there are four key takeaways that emerge from this analysis. They are:
i. Unemployment rate among engineering graduates is very high, specifically in some states such as Kerala and Rajasthan.
ii. Public Administration, Financial Service/Intermediation, Agriculture, and Retail Sales are among the top 15 sectors where engineering graduates work. This is a cause for concern, as a number of trained engineers are working in non-core jobs.
iii. There is a stark difference in outcomes between men and women in terms of labour force participation. Concerted policy/social efforts would need to be taken to improve the participation numbers, specifically in states such as Rajasthan, Odisha, and Tamil Nadu.
iv. Despite all the shortcomings, engineering graduates (on average) earn substantially higher levels of wages. This is possibly the reason why engineering still has some sheen. However, this might not be a very accurate metric for people to base their career choices on.
Footnotes
1: All the analysis in this article is using the PLFS. I use data from ‘Visit 1’ of PLFS for computing all numbers. Engineering graduates are defined as those with a technical degree in engineering/technology or a post-graduate diploma in engineering/technology. The definitions for ‘technical degree’ and ‘engineering/technology’ are as defined in PLFS.
2: I consider all those with ‘Status Code’ below 81 as in the labour force. Those with ‘Status Code’ 81 are considered unemployed.
3: Simple averages do not account for key characteristics such as the skill level of the individual or their conscientiousness. Hence, to ascribe the difference in wage levels purely to the engineering degree would be fallacious.
4: Yeo D., Mantel H., and Liu T.-P. 1999. Bootstrap variance estimation for the National Population Health Survey. In Proceedings of the Survey Research Methods Section, 778–785. American Statistical Association. Accessible at: http://www.asasrms.org/Proceedings/papers/1999_136.pdf
All views are personal — Akshay Natteri Mangadu
