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Why is the participation of Indian women in paid work declining?

Prof. Ashwini Deshpande writes on the low and declining levels of female labour force participation

Ashwini Deshpande

28 February, 2023 | 4m read

The low and declining level of female labour force participation (FLFP) has been the subject of intense academic and policy debate. There is a great deal of attention on social norms that might constrain women’s labour supply or their ability to work: the overwhelming burden of domestic work, pressures of childcare or elderly care, the stigma attached to working outside the home, fear of sexual violence and so forth. 

The focus on a binary indicator — in or out of the labour force– implicitly leads us to think about labour force participation as a labour supply issue. Women typically report lower rates of unemployment compared to men; therefore, when they are not employed, the default assumption is that they must have voluntarily chosen to exit the labour force.

Cultural norms do matter: South Asia in general, and India and Pakistan in particular, have among the most unequal gender divisions of domestic chores. My research with Naila Kabeer shows that the social norm of being predominantly responsible for domestic chores is an important constraint to Indian women’s ability to participate in paid work.  However, national-level survey data has repeatedly documented Indian women’s willingness to work if work was available either at or near their homes.

The persistently low level of FLFP in India over the decades indicates a state of permanence or stationarity in women’s LFP status. Additionally, the decline since 2004 suggests a transition in one direction (exit out of the labour force from an already low level), but not in the other direction (entry into the labour force). 

Using nationally representative longitudinal data, where the respondents are interviewed three times in a calendar year, Jitendra Singh (Ph.D. student at Ashoka University) and I present novel evidence which shows that women frequently enter and exit the workforce over short intervals. This employment volatility is not explained by supply-side factors: marriage, motherhood, childcare etc. We show that women work when they find work, suggesting that the declining LFPR is an artefact of insufficient jobs and declining demand for women’s work. 

Figure 1 shows that over time, the share of agriculture in total employment has declined. Between 1993-94 and 2019-20, the proportion of workers who were employed in agriculture fell from 63% to 44%. The share of manufacturing and services has risen. This reflects the process of structural transformation. 

Figure 1

Agriculture employed over 75% of female workers in the early 1990s, and in 2019-20, employs 58%: a decline of 17 percentage points. The share of manufacturing among female workers has increased by one percentage point, and that of services has risen with fluctuations, but not sufficiently to absorb the declining agricultural opportunities. 

The first-order issue related to employment in India over the last three decades is the lack of adequate job opportunities for men and women, described as “jobless growth” as well as precarity and informality of labour markets. The post-1991 economic growth was driven by sectors such as information and technology (IT) which are not labour-intensive. Since 2016, there has been a deceleration of economic growth, which means that both growth (jobless or not), as well as jobs, are matters of concern. 

To increase female LFPR, we need to boost job creation as well as make them accessible to women. 

Edited by Dr Yukti Arora 

Reference articles: 

  1. Norms that matter: Exploring the distribution of women’s work between income generation, expenditure-saving, and unpaid domestic responsibilities in India, WIDER Working Paper Series wp-2021-130 | World Institute for Development Economic Research (UNU-WIDER).

Authors: Ashwini Deshpande and Naila Kabeer

  1. Dropping Out, Being Pushed Out or Can’t Get in? Decoding Declining Labour Force Participation of Indian Women, IZA Discussion Paper No. 14639, 2021.

Authors: Ashwini Deshpande and Jitendra Singh

Study at Ashoka

Study at Ashoka