The appalling levels of under-utilised potential have a bearing on wages—as per one of the models Kukreja uses to estimate the wage impact of mismatched education, overeducated workers earn 18% less in terms of daily wage than similarly educated workers in a ‘matched’ job even though each additional year of schooling increases daily wage by 5.3%. It is intuitive, then, that these overeducated workers would be having high levels of dissatisfaction with their jobs. While Kukreja’s study considers data only for the T&C industry, it is likely that the picture is just as bleak for the manufacturing sector, which, in turn, means a mammoth employment problem in the country. Even as there is massive under-utilisation of potential, the mismatch also means that the hiring of low-skilled workers, who may be ‘matched’ for certain jobs, is pushed down as over-educated workers take their place. A 2014 paper by Sahana Roy Chowdhury, who was with Icrier at the time, published in The Indian Journal of Industrial Relations shows that the employment elasticity decline in the manufacturing sector between 2000 and 2010 was more pronounced for labour-intensive industries, indicating a lack of skilled manpower that brought about substitution of labour—exacerbating the employment problem.

The Integrated Skill Development Scheme for the textiles industry that aimed to create 15 lakh trained workers across segments of the industry by 2017, at the end of August 2018, had trained about 11.14 lakh, of which 6.84 lakh had found employment—more than a third, thus, are yet to find employment even after training. With growing automation, skill-benchmarks will only be pushed higher. The problem, thus, will only become more acute now unless skilling efforts shift to top gear.