DIGITAL LITERACY AND ARTIFICIAL INTELLIGENCE AS DETERMINANTS OF YOUTH EMPLOYMENT OUTCOMES IN INDIA: A COMPREHENSIVE ANALYSIS OF THE 2024-2025 LABOR MARKET TRANSITION

Abstract

This study examines the role of digital literacy and artificial intelligence (AI) as key determinants shaping youth employment outcomes in India during the 2024–2025 labor market transition. As India experiences a demographic advantage with a large youth population, the sustainability of this demographic dividend increasingly depends on the capacity of young people to acquire and apply digital and AI-related skills. Drawing on secondary data from national labor surveys, education reports, and industry studies, the research analyzes how disparities in digital literacy and AI proficiency influence employability, sectoral mobility, and job quality among youth aged 15–29. The findings reveal that while youth unemployment in India has declined in recent years, employment opportunities are becoming more skill-selective and technology-intensive. Digital literacy has emerged as a baseline requirement for entry into formal employment, while AI fluency is rapidly redefining expectations even for entry-level roles. However, significant inequalities persist across rural–urban locations, gender, and socio-economic backgrounds, limiting equitable access to technology-driven jobs. The study also highlights a paradox wherein high enterprise-level AI adoption coexists with low preparedness among fresh graduates, exposing youth to risks of job displacement, underemployment, and psychological stress. By synthesizing economic, technological, and sociological perspectives, this research underscores that digital literacy and AI capabilities are no longer supplementary skills but structural prerequisites for youth employment resilience. The study contributes to policy and academic discourse by emphasizing the need for integrated educational reforms, targeted digital skilling initiatives, and inclusive AI strategies to ensure that technological transformation translates into broad-based and sustainable employment outcomes for Indian youth.