The Kerala paradox of 100% literacy but only 42% graduate unemployment: A policy misalignment?

The Hindu

5 days ago

In a nation that celebrates rising literacy rates as markers of progress, Kerala has long stood out as a success story. With near-universal literacy, strong gender parity in education, and robust public schooling systems, it is often held as a model State in India's educational discourse.
Yet, this very success reveals an uncomfortable truth. According to the Periodic Labour Force Survey (PLFS) 2022-23, Kerala reports a graduate unemployment rate of 42.3%, one of the highest in the country. For a State often viewed as educationally forward, this statistic raises troubling questions about the relationship between academic learning, employability, and the structural design of our higher education policy.
At the heart of this paradox lies a systemic misalignment between what is taught and what the job market demands. Kerala's educational model has traditionally emphasized formal academic pathways with relatively less focus on vocational or skill-based education.
As per the Kerala State Planning Board's Economic Review 2023, while higher education enrolment is robust, nearly 70% of courses offered are in general streams like humanities and pure sciences, with minimal alignment to industry-specific or emerging sectors. In contrast, countries like Germany, through their dual vocational education system, integrate apprenticeships with formal education, ensuring smooth school-to-work transitions. Kerala, and India more broadly, have yet to institutionalize such bridges.
How other States are doing
The problem is not isolated to Kerala alone. Tamil Nadu, a southern peer, offers a revealing counter-example. While also boasting high literacy and educational attainment, Tamil Nadu has built a relatively stronger network of polytechnic institutions and vocational training centers. As per NSDC's Tamil Nadu Skill Gap Report, the state's industrial linkages and sector-focused skilling have helped reduce the incidence of graduate unemployment to 23.4% (NSDC, 2022).
Karnataka, with its growing tech ecosystem, has similarly diversified its post-secondary offerings through public-private training collaborations that provide students with both soft and hard skills. These models highlight how the Southern states themselves offer diverse approaches, some more successful than others in linking education with employment.
Turning to the North, the contrast is even more stark. States such as Bihar and Uttar Pradesh continue to struggle with low school completion rates and poor employability indicators, even among graduates. In Bihar, the graduate unemployment rate stands at 33.9% (PLFS 2022-23), while only 25.7% of youth aged 18–23 are enrolled in any form of higher education (AISHE, 2021-22). The challenge here is dual: improving access to quality education while ensuring it meets market relevance.
Policy framework to boost employability
The national policy backdrop complicates the situation further. The National Education Policy (NEP) 2020 rightly emphasizes flexibility, multidisciplinary, and skill integration. Yet, its rollout on the ground remains uneven. In Kerala, the four-year undergraduate structure has not yet fully addressed the mismatch between degrees and employability. Moreover, as the NSDC (2022) points out, only 17% of Indian youth receive formal vocational training, compared to 52% in the United States and 75% in Germany. This gap reflects both cultural and institutional inertia against vocational pathways, often stigmatized as inferior to mainstream degrees.
Another issue is the burgeoning private higher education sector, which has mushroomed without consistent quality benchmarks. As highlighted by the University Grants Commission (UGC), nearly 60% of private colleges in India operate without NAAC accreditation, raising concerns about faculty quality, infrastructure, and academic outcomes.
Kerala's relatively strong public higher education system has shielded it from the worst of this crisis, but a lack of diversification persists even there. According to the Kerala Economic Review (2023), less than 10% of state-funded higher education institutions offer STEM-oriented vocational programs, despite rising job demand in such sectors.
It is also worth noting that Kerala has one of the highest rates of outward migration of educated youth. The Centre for Development Studies reports that over 2.1 million Keralites live and work abroad, primarily in the Gulf, many of whom are graduates unable to find appropriate jobs at home. While remittances help the State's economy, they also reflect a failure of domestic job creation and talent retention.
A policy redirection is urgently needed. First, a fundamental overhaul of career counseling and academic advising is required at the secondary school level. As per the NCERT's National Achievement Survey (NAS) 2021, only 13% of students receive formal career guidance, leaving most to pursue degrees without understanding their employment prospects.
Second, vocational education needs mainstreaming, not marginalization. Kerala can draw from Germany's Berufsschule model or Singapore's Institute of Technical Education, which blend classroom learning with real-world apprenticeships.
Third, states must establish employment-linked metrics in evaluating higher education institutions. Tamil Nadu's recent move to integrate placement statistics into college rankings could be adapted across States.
Fourth, central institutions such as the NSDC and the Ministry of Education must work in tandem to ensure that the skilling ecosystem is not divorced from formal higher education. Finally, a National Skills Registry that tracks student outcomes across degree programs, job sectors, and geographies can aid both planning and accountability.
In sum, Kerala's graduate unemployment is not merely a state-specific problem; it is a mirror reflecting the structural inefficiencies in India's education-employment continuum. The nation must move beyond celebrating enrolment numbers and focus instead on educational utility. If we truly seek demographic dividends, we must stop equating degrees with success and start aligning education with capabilities, aspirations, and economic realities.
(The author is Professor and Dean, Vinayaka Mission's School of Economics and Public Policy)