New Delhi, Delhi, India
Mar 30, 2019, 02.12 PM
In India, a landmark shift in the country’s demography is underway. In 2015, there were 460 million people between the ages of 15 – 34 years. By the 2030s, this number is projected to increase to 490 million – the largest youth population in the world. Such a demographic dividend will entail that the number of people working and contributing to the economy increases significantly. This presents itself as an opportunity for India to become a global leader in terms of economic growth and productivity. However, it could also be a massive problem.
Simply put, there will be a large number of people looking for jobs in their preferred sector. If they do get these jobs they are searching for, and do them efficiently, the economy of India will grow exponentially. However, Indians looking for opportunities today face a major challenge – the lack of skills instilled in them at the elementary school level itself. Less than 50 per cent of Class V students in India can read texts at the reading level of Class II. This lack of rudimentary skills snowballs through high school and college, leading to individuals who are willing to work but lack the skills to do so. If this continues, India will end up wasting the potential of millions of people who could, with the right skills, become hardworking professionals backing the growth of the Indian economy. Instead, it would face a crisis of unemployment and economic distress.
The role of behavioural economics and the ‘nudge’
Economics, as a social science, can enhance the analytical competency and critical thinking of an individual. As a subject of study, economics instils the ability to study the cause and effect of a particular event in a person. Can students specialising in economics, then, understand the need for instilling better skills in students to lead to a more capable set of workers in the long run? The answer is most definitely a positive one.
Students and professionals in the field of economics can organise the workforce by applying behavioural economics to the current educational setup.
According to Richard Thaler’s theory on behavioural economics giving people incentives, or ‘nudges’, can make them act a certain way. To overcome the skill gap in India, the entire education system must be economically incentivised to provide the skill building that is required to train the future workforce of the country. There is a foremost need to transform the way students are imparted education. Students, from a young age, should learn practical life skills along with the usual pedagogy to instill a sense of what they will face in the professional world. Skills like analytical thinking should be ingrained since a young age. Writing, comprehension and effective communication should be taught to students at every stage of education.
Economics as a tool to strengthen the job sector
Too much time has been spent lamenting the jobs problem India has faced post-independence. India’s official unemployment rate of 5 per cent tells us, though, that almost everybody who wants a job has a job, and so perhaps the debate should be about whether Indians have access to the jobs and wages that they need or want. Students of economics will help policymakers to understand the job scenario from an analytical perspective, so that concrete solution can emerge for our jobs problem. In the future, think-tanks and policy organisations will emerge in higher numbers to assist organisations, as well as governments, achieve the optimum combination of different elements required for sustainable growth; such as the composition of man-machine in the workforce, degree of entrepreneurship promotion to boost income, redistribution of labour hours etc. Only students of economics can provide viable answers to such questions as they have a unique understanding of both the human as well as the quantitative side of things.
Transforming educators, education and policies
To achieve this outcome, the country must invest in the compensation of teachers. Underpaid educators contribute less to imparting essential skills in students. Instead, students end up believing in the false power of rote learning. Thinking, analyzing, applying – these are skills that only motivated teachers will teach students. Compensating educators to stay abreast of the latest pedagogical methods and innovations, such as smart classrooms and interactive learning, can ensure that students at every level are given the right educational opportunities.
While educational institutions need to provide better opportunities to students, institutions themselves require better opportunities from the government. The educational sector must look into private sector participation in order to increase the funding they receive for schools and educational programs. Economic compensation is essential to motivate professionals in education, but equally important is ensuring that the programmes thus created are successfully building skills that are relevant in the professional world. Institutions that provide job-relevant training in economics thereby come into the picture. More resources for institutions providing these social skills would lead to a more talented workforce.
A critical step towards skill building of the burgeoning youth population would be to create long term plans within the government which contribute to skilling the youth. Policies related to the education system are in dire need of reformation in terms of compensation, content and method of teaching. At the government level, institutions such as the NITI Aayog can be tasked to modify curriculum to suit the modern student – one who requires better, more future-ready skills right from the outset of his or her education.
Each of the aforementioned requirements can be deeply understood and executed by students who are systematically trained in economics. Students who understand the power of a nudge will be able to fathom how humongous the effect of a simple action can be. Thus training our youth in economics, we are causing an entire generation of workforce, created through a fortunate demographic dividend, to realise its full potential.
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL.)