New Delhi, March 17 -- India's young workforce is becoming more educated, even as challenges persist in their transition into employment, according to Azim Premji University's State of Working India 2026 report released on Tuesday.

The report said India has expanded access to higher education over the past four decades, alongside a shift of young workers from agriculture to industry and services and a reduction in gender- and caste-based disparities.

It cautioned, however, that the extent to which this increasingly educated and aspirational population is absorbed into the labour market will determine whether the demographic dividend translates into economic gains. India's working-age population share is expected to begin declining after...