Hi and welcome to Ones and Twos, FP Economics podcast. Every week we take a couple data points, use them to try to explain the world. I'm Cameron Abadi, FP's deputy editor, with you in Berlin, Germany. Joining us in Berlin is FP's economics correspondent and Columbia University Professor Adam Tooze. Hi, Adam.
So, we have one data point for you all today, and that is 40%. That is the share of Indian college graduates under the age of 25 who are estimated to be unemployed right now. That is something like 11 million people who have a degree, but have not been able to use it in any significant sense. And there's a lot of obvious anger behind that data point. It found a spark this year, specifically beginning in May, when India's chief justice described unemployed youth in India as being like cockroaches. That was an insult that became a kind of rallying cry. And there was a new movement called the Cockroach Janata Party. It intended to be a sort of satirical movement. It was born at that time. And then that kind of fuse was lit by another political scandal around that same time. Evidence that papers for India's national medical school entrance exam had been leaked and sold. That felt like a betrayal for this generation that saw this exam and others like it as a kind of ladder to climb Indian society. Pretty soon there were protesters marching on parliament. This cockroach movement was then met with baton charges and internet shutdowns this summer. And ultimately the government seemed to back down. It let the Indian education minister resign, but it seems like the movement may just be dormant given the extent of issues that are motivating it. And so, yeah, to unpack what exactly is going on with the cockroach movement and the Indian economy more broadly, we thought we'd dig in. And Adam, to start off with, it does seem like India's labor market has stagnated, especially for the young. And we've talked in the past pretty extensively about Prime Minister Modi's overall economic strategy, his sort of developmental state strategy. And I'm curious whether the labor market issues have something specifically to do with that strategy of growth for the country and for industries in India overall.
Yeah, this is a topic of such daunting scale and drama that it really kind of takes your breath away. Because when we talk about the labor market in India, as you say, this is the way this question is discussed and there's this huge problem of educational mismatch. But it's just worth lingering over the numbers. There are 367 million people in India between 15 and 29. That's most of the population of Europe. You know, just in young people in those cohorts. I mean, it's absolutely staggering in its scale. This is a Chinese scale drama that just explodes the conventional frameworks of Western understanding. Like when we think we have a labor market problem, it's a million people here or there. This is 367 million people. And the kind of desperation that you feel from this protest, this sense of like, how on earth, what are we supposed to do if even the exams are rigged? Like what are you supposed to do if hundreds of thousands of people apply for small numbers of jobs which are advertised in the Indian public service. Like the sense of panic and just demographic cohort generational pressure on young people in the big Asian economies is like nothing we know in the West, right? And so yes, this is really a huge challenge to any development program and Modi's in particular, which is that it has produced growth but it has not produced structural change and with structural change it has not produced the jobs that will absorb the increasingly gigantic flow of graduates from India's education system. And that's the core of the problem, which is that there is measured GDP growth which is undeniable and anyone who's visited India can see it. Like it's there. The infrastructure has changed. The GDP growth is in that sense really real and for the top segment of Indian society the resulting affluence is remarkable and easily approaching and exceeding in many cases developed economy norms. And then there is this huge part of Indian society and the Indian economy which has simply not experienced that same kind of growth. So where most of the jobs growth is in India in this period are, I mean agriculture. So India added 83 million jobs since the pandemic. Added 83 million jobs, that's half the American labor force, lifting employment from 490 to 572 million with gains for both men and women, but half of those are in farming. And above all, that's where women are working. If you look at the structure of the Indian labor market, the share of people in formal employment with regular contracts is well, it rose from 18% in 2012 to 23% in 2025, which means that 75 plus percent of the Indian population is basically in informality, either in literally casualized work or in something that's closer to formalized but effectively still radically precarious self-employment. So, this is the central problem that is being voiced and articulated in these protests. And I think you're right to say that this is surely just the beginning of a ruling process of negotiation because this isn't China. This isn't a one-party regime with a repressive police state and no freedom of expression. It is by no means a liberal paradise. It is not a free-for-all by any means, but the power of insurgent mobilization in India is absolutely real. We've seen it over and over again with the peasant protest most recently. And this is the follow-on successor, if you like, to that wave of protests. And so it's a very dramatic story. And despite the GDP growth numbers, which everyone will have heard about and we've spoken about on the show, the reality of this social impasse for the current generation in particular, who are after all the demographic dividend, you know, if you can dynamize and employ and raise the productivity of this huge wedge, you know, 360 million young people into the Indian economy, this is the core of your economic growth story, and it's just so far not happening.
Yeah, that comparison with China is, I think, a useful and a natural one, as you mentioned, in terms of the scale of these countries. And so, if we were to dig into that, I mean, the heart of this movement is a discontent with India's education system and a sense that it's not functioning in its sort of social function and role. What would it mean to compare that to China's education system? Again, this all requires simplification of a pretty dramatic kind, but is India's education system struggling? Is it poor compared with China's broadly speaking?
Yeah, I mean caveats are really in order here. We're generalizing about a system which is oceanic in scale. It's like, you know, Europe and America's combined in its scale. And self-evidently as we know from our everyday interaction with colleagues, friends, family indeed who've come from South Asia, India's education system has many incredibly strong points. It has notable centers of technology like the Indian Institute of Technology in Delhi and its counterparts in the other great cities of India. It has liberal arts colleges which provide a constant pipeline of absolutely brilliant humanity students. So, India produces top-class talent across all the disciplines. Great engineers, great historians, the whole works. It also has a giant public university system which if you've ever had the chance to visit is like nothing I've ever seen before. It's like entering the entire city. It's a little bit like maybe UNAM in Mexico City, like going into the big Indian university campuses. It's like entering a world in which the entire world just consists of classrooms and teaching and a whole bunch of other activities which are then attached to those. So, it's a formidable and fascinating landscape. And over the last 30 to 40 years, the other thing to say is there's been huge transformation. Right? So, the number of universities has exploded from 1,600 accredited institutions in 1991 to 70,000 today. With huge jumps especially in the 2000s. Most of those are private and many of them are providing something which is a bit like community college Fachhochschule in the German sense. So, technical training especially for Indian engineers and the tech sector. There has undoubtedly been a story of widening access. This is remarkably the case both for women where participation rates are now very high and comparable with men and also across social class inequalities and caste barriers which in India remain massive and are intense and if you've ever had the chance to visit, they're just so in your face the whole time. It's really profoundly impressive in the sort of neutral sense of just you can't escape the impression of this profoundly structured, hierarchical, unequal society. But even there, we have a huge increase in enrollment. So, that's like one side of this story and without that you wouldn't be able to explain modern India. And on the other hand, there is as it were the dark side which is that India's top university, the Indian Institute of Technology in Delhi, at least by the conventional university rankings, ranks at 118th in the global rankings. So, by comparison with China which increasingly dominates the top 10. And from conversation with friends in India, what really struck me most was their deep deep concern about elementary education in India, right? Because the basic human capital formation of any society is done not really at the top end of the education system where in the end brilliant people often coming from well-resourced households are going to prevail and charge their way through. But what you really want is to build the biggest possible pipe, the largest possible entry to the funnel. And that's where India on comparative statistics has fallen down. And this was evident already in the early 1980s when you compare India and China when the World Bank first got into China. And basically, because their standard of what a poor country looked like was India, and then they discovered post-Maoist China, which actually had near comprehensive literacy. And they hadn't seen anything like it. So, in India really, again, there's huge change. So, the Right to Education Act of 2009 has now firmly established that there must be schools in every village, that there is a requirement that kids attend school. So, within the last 20 years, right, there has been this move towards comprehensive enrollment. The basic logic of state building, of building a national society, is happening in India on a dramatic scale. But when you look at the results, when you test for what kids are actually learning in those thousands, tens of thousands, presumably hundreds of thousands of village schools, the outcome is unsurprisingly poor. The teachers don't show up, and crucially, of course, there's very little cultural capital in the households, and particularly with mothers, many of whom are from older generations who are illiterate, and therefore find it very hard to support their kids' education. And then there are increasingly crushing demands on families to find sources of income in a new and developing economy. And so, it's the same story, right, where we see development that's undeniable, where you see the development of education in this case, and yet the structural change that will be required to really transform society is not happening to the same extent. And it's at the elementary level that my much better informed colleagues in India say that's really where the issue is deepest. There are arguments about whether or not Indian graduates are doing too many humanities and social science subjects and not enough tech. But like by the time they're at university, they have very high levels of literacy compared to the hundreds of millions of kids coming out of badly funded rural schools which just really don't have the wherewithal. And so that I think is the gap that is worth focusing on.
