THE UPSKILLING PARADOX: EDUCATION EXPANSION, INSTITUTIONAL CAPACITY, AND EMPLOYMENT OUTCOMES IN INDIA

Abstract

India has expanded access to schooling and higher education at an unprecedented scale, yet employment outcomes for educated youth have not improved commensurately. In response, national policy frameworks increasingly position workforce upskilling as central to employability and economic growth. Despite this emphasis, unemployment among educated young people remains high, job quality is weak, and access to effective skill development is uneven. This paper examines why India’s focus on upskilling has not translated into improved employment outcomes. Drawing on labor market evidence, education research, and policy analysis, it argues that the binding constraint lies not in skill deficits or policy ambition but in limited institutional capacity for delivery. Upskilling has largely been treated as a programmatic intervention rather than as an institutional challenge, resulting in fragmented, centralized, and poorly aligned delivery systems. By reframing upskilling as a problem of institutional design and governance, the paper shifts attention from individual capability to the conditions under which skills are produced, applied, and rewarded. This perspective has implications for how upskilling initiatives are designed, evaluated, and governed.