The female Labour Force Participation Rate had been steadily declining since 2000 and touched 24.5 in 2019, before inching up, particularly in rural areas.
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The story so far: The authors of the India Employment Report, 2024, released recently by the Institute for Human Development and the International Labour Organization, point out that key labour market indicators have improved in recent years. The Labour Force Participation Rate (LFPR), the Workforce Participation Rate (WPR) and the Unemployment Rate (UR) showed long-term deterioration between 2000 and 2019 but improved thereafter, the authors note, saying that the improvement coincides with periods of economic distress, both before and during the COVID-19 pandemic, with the exception of two peak pandemic quarters.
What about women’s participation?
The female LFPR is very low compared to the male counterparts; in 2023, the male LFPR was pegged at 78.5; and the women LFPR was 37. The world women LFPR rate is 49, according to the World Bank figures. The female LFPR had been steadily declining since 2000 and touched 24.5 in 2019, before inching up, particularly in rural areas. But the writers point out that notwithstanding the modest improvements, employment conditions remain poor.
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Amit Basole, who teaches Economics at Azim Premji University, and heads the Centre for Sustainable Employment, explains that the increase in labour force participation has come mostly in rural areas and mostly in self-employment, which means largely unpaid work. “This suggests that it is distress resulting from the economic slowdown prior to COVID and then the pandemic itself that has contributed to women entering the labour force,” he says.
Prof. Basole adds that there are some other hypotheses out there, such as improvements in measuring women’s work in the Periodic Labour Force Survey and increased non-farm employment for men that has led to women substituting for men in agriculture. “But this is less likely. However, definitive evidence on the cause(s) is lacking,” he notes.
Where are women employed?
The India Employment Report shows that it is women who largely account for the increase in self-employment and unpaid family work. Nearly two-thirds of the incremental employment after 2019 comprised self-employed workers, among whom unpaid (women) family workers predominate. The share of regular work, which steadily increased after 2000, started declining after 2018.
The rate of youth not in employment, education or training globally has been consistently the highest in South Asia, at an average of 29.2% between 2010 and 2019 (ILO 2022a). India also has a large share of youth not in employment, education or training, and the rate is higher among young women than men.
What are some of the reasons for low women’s participation in the labour force?
Economists and women’s rights experts point at various barriers women face in terms of a careers or a job. They list factors from a lack of jobs, women being made responsible for all care-giving duties at home plus cooking and cleaning to low wages, patriarchal mindsets and safety issues. In her 2022 book, The Making of a Catastrophe: The Disastrous Economic Fallout of the COVID-19 Pandemic in India, Jayati Ghosh, observing the sharp decline in women’s labour participation between 2004 and 2018, writes that only some part of the phenomenon of women moving out of the labour market could be explained by greater involvement in education, especially for the age cohort 15 to 19. But with participation rates falling for women across all ages, “clearly, there was a process in operation, which has also been noted globally, of women being squeezed out of employment because of overall scarcity of paid work.”
Prof. Basole feels there are both supply and demand side reasons for the decline in women’s LFPR. On the labour demand side, in general, India’s growth pattern has not been job intensive. This combined with social norms that restrict women’s mobility and make them primary caregivers at home, means that women are not free to take up available opportunities. In addition, concerns over public safety and lack of transport also confine women to looking for work close to home, further limiting their options, a point Prof. Ghosh too makes.
The 2023 Economics Nobel Laureate Claudia Goldin’s research showed that several factors have influenced the supply of and demand for female labour. “These include women’s opportunities for combining paid work and a family, decisions relating to education and childrearing, technical innovations, laws and norms, and the structural transformation of the economy.” In a paper about her research, the Royal Swedish Academy of Sciences, pointed out that at the heart of Golden’s analysis is the fact that women’s choices have often been, and remain, limited by marriage and responsibility for the home and family. Her research may have been conducted in the U.S., going back 200 years, but her insights hold true in many other countries, including India as well.
What needs to change?
Economists say interventions are needed on both the demand and supply side of the labour market. On the demand side, says Prof. Basole, policies that promote labour intensive sectors (in both manufacturing and relatively higher productivity services) are needed. Public investment in safety and transport is also critical as is public investment in affordable child and elderly care. “All of these types of support can enable women to work outside the home and take advantage of relatively better paying opportunities,” he adds.
- The India Employment Report shows that it is women who largely account for the increase in self-employment and unpaid family work.
- Nearly two-thirds of the incremental employment after 2019 comprised self-employed workers, among whom unpaid (women) family workers predominate.
- The share of regular work, which steadily increased after 2000, started declining after 2018.
