Graduates 43.8% less likely to get informal jobs: EAC-PM study

Synopsis

Based on unit-level data from the 2025 Periodic Labour Force Survey (PLFS) and the Annual Survey of Unincorporated Sector Enterprises (ASUSE), the study finds that vocational training also improves labour market outcomes, reducing the likelihood of informal employment by 4.8 percentage points.

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New Delhi: Workers with graduate-level education or higher are 43.8 percentage points less likely to be employed informally than those with lower education levels, according to a working paper by the Economic Advisory Council to the Prime Minister (EAC-PM) released Monday.

Based on unit-level data from the 2025 Periodic Labour Force Survey (PLFS) and the Annual Survey of Unincorporated Sector Enterprises (ASUSE), the study finds that vocational training also improves labour market outcomes, reducing the likelihood of informal employment by 4.8 percentage points.

"Female household headship significantly improves employment quality by raising the likelihood of regular wage work and reducing dependence on casual labour," the paper titled 'Formalisation of Labour Market in India: Evidence from PLFS and ASUSE 2025 Unit-Level Data' said. It added that registered women-owned enterprises also have a 5.6 percentage point higher probability of accessing formal credit than comparable unregistered firms.

Informality continues to be concentrated in rural India, which accounts for nearly 59% of the informal workforce, against 41% in urban areas.