Education, Employment and Labour Markets
While education and skills have great intrinsic value, they are also deeply interconnected with labour market outcomes and labour market inequalities, and with the pace and pattern of growth and development.
Education focuses on largely a structured acquisition of knowledge, while skills focus on how to do things and achieve specific outcomes. Since knowledge and skills can become obsolete, both require to be embedded in a life-long learning approach. Further, although education and skills can be complementary and symbiotic in fostering learning, they are not always aligned. It is possible to have education devoid of practical skill, and skill without substantial knowledge. For meaningful labour market outcomes—especially decent work—the integration of education and skill is essential. The disconnect between the two often results in imbalances, such as youth possessing formal educational qualifications that are irrelevant in a rapidly changing economy driven by technology and innovation.
Globally, the integration of education and skills varies. Some regions successfully blend theoretical learning with practice, while others continue to separate them. In India, formal general education, technical and vocational education, and skill training were segregated till a few decades ago. While education has expanded rapidly, its quality and employability, diversity and inequality in standards across regions and institutions raise a number of questions regarding the links between education and the labour market for different groups and strata in society. The New Education Policy 2020 which is being rolled out, has now attempted to focus on quality, relevance and inter-disciplinarity of education as well as increase in its skill content.
On the other side, formal skill training came under focus since the early years of this century, when a number of reports pointed out skill gaps and deficits in the labour market. Developments in skill training have tried to bridge the gap between skills and mainstream education, and skill training programmes have focussed on modular training, internships, public -private partnerships, formal training of different durations, internships, and recognition of prior learning (RPL). Informal training and learning on the job also continue to acquire a large space in the skill eco-system. A large internship programme with the top 500 companies has been rolled out in 2023-24. However, the links between skill training and labour market Education, Employment and Labour Markets outcomes is still at best, tenuous, and the role of the various stakeholders still requires to be fully delineated.
Rapid technological changes are making significant changes to the education and skills scenario. In the face of disruptive technologies and technological change, treating education and skill as isolated components risks rendering learners obsolete. Even small-scale, labour-intensive industries are being impacted by emerging technologies like artificial intelligence. Firms relying on static skill sets risk redundancy. These changes necessitate a different paradigm for education, skilling and upskilling and their mutual integration.
Sustainability adds another crucial dimension to education and skills. Moving from a linear to a circular economy demands green jobs, grounded in integrated education and skills. Without this integration, green transitions may exacerbate precarities rather than resolve them. This is fundamentally a governance challenge. Firms that resist socio-economic and technological upgrading for short-term convenience risk falling into obsolescence traps. In buyer-driven value chains,upstream suppliers lacking skill and learning capacity face existential threats. Especially in small firms, fostering learning for product and process innovation is essential—particularly as global value chains shift from comparative advantage to capability-driven models.
While policy efforts increasingly incorporate inclusive and sustainable learning, challenges remain in harmonizing general, technical, and vocational education. Key questions include how institutions secure investments for quality education, how they link skills to decent work, and how public policies can align labour markets, industries, and the state toward a shared purpose. Higher education has a critical role to play, evolving from a qualification-centric model to one emphasizing performance, innovation, and flexibility. This applies across sectors and employment forms—whether gig work, manufacturing, software, or academia.
In navigating future-of-work transitions shaped by ageing populations, climate change, migration, and digitization, understanding the interplay between education, skills, and outcomes like wages and employment is vital. Hence, educational and skilling systems must engage with both the state and industry to bridge learning and labour. Some suggested key dimensions and issues for the prospective paper writers are the following:
- What determines the variations in educational infrastructure and outcomes? How does this vary across regions and for socio-economic groups?
- How significant are spatial, socio-economic and regional divides in skill building capacity. How can these be bridged?
- How do higher education and skill formation affect wages and decent job availability? Do the results vary across time and space? Can inclusive and high-quality education and training improve labour market outcomes? How have education and skill ntraining programmes performed in India?
- How does education – technical and general – influence the pace and pattern of economic growth and productivity?
- How can public policies align education with labour market needs and reduce persistent inequalities?
- What are the labour market benefits of aligning technical, vocational, and general education?
- What are the learnings from existing models of imparting general, technical and vocational education and skills for India and the global South?
- How do internships and apprenticeships bridge the gap between education and employment? What role have internship schemes in India played in shaping firm productivity and labour market outcomes?
- Curriculum innovation: What role do emerging domains (e.g., green skills, digital literacy, emotional intelligence) play in curriculum reform?
- How does the digital economy shape reskilling and upskilling, particularly in the gig sector?
- Which occupations face continual upskilling pressures, and how does technology accelerate this need?
- Is reskilling a response to skill obsolescence? What are its primary delivery channels?
- How do gender and demographics influence access to reskilling and upskilling opportunities?
- Employer-led skilling ecosystems: What is the role that industries play or can play in co-investing in building sector-specific skill academies or centres of excellence?
- Behavioural economics of learning: How can nudge-based approaches motivate employers and mid-career workers to engage in skilling-reskilling?
- Migrant workers and training: What factors constrain or enable migrant workers to access skill training ad lifelong learning for decent work?
- Green skill taxonomies: What specific skills are required for solar energy, waste management, biodiversity restoration, etc.?
- Workplace redesign: How do skills influence the spatial and digital reorganization of workplaces in sustainable systems (e.g., remote work, lowcarbon operations)?
- How can SDG 4 (Quality Education) and SDG 8 (Decent Work & Economic Growth) be aligned? How do education-skill linkages advance other SDGs (e.g., SDG 5 on gender, SDG 10 on inequality)?
- Informal sector inclusion: How can informal workers be integrated into SDGbased policy frameworks for skilling and education?
- Fiscal pathways: What are the financing models (e.g., public-private partnerships, ESG investments, impact bonds) to fund large-scale educationskill initiatives?
- Human-AI collaboration: How do education systems prepare students for co-working with machines rather than being displaced by them? Are systems building higher-order thinking, creativity, collaboration, and adaptability alongside technical skills?
- Multi-stakeholder governance models: What role has been played by tripartite collaborations (government, industry, other non-state institutions) play in delivering skill-education integration?
- Decentralised implementation: What role do decentralise – at or below the level of states/provinces – play in tailoring education-skill strategies to local labour markets?