It's time to give priority to women's work participation

It's time to give priority to women's work participation

MG Road is seldom considered as a safe place for working women who travel for work to either Gurgaon or Delhi. Almost everyday untoward incidents related to molestation, sexual harassment, kidnapping or rape that occur here are reported in various NCR-based newspapers. Clearly, safety of women office-goers and female workers is one of the major determinants of their (low) labour force participation, even in urban locations like Gurgaon or Delhi.

The latest issue of the India Development Update from the World Bank, (released on 29 May, 2017) spells out such constraints, which deter women to join the labour force. According to the same document, low labour force participation (LFP) of women in the economy impose constraints on a country’s economic growth, women’s empowerment, and the outcomes for its children (in terms of nutrition, education and health, among other things). Please click here to access the World Bank document.

The report entitled India Development Update: Unlocking Women's Potential (2017) from the World Bank says that amidst shrinking job opportunities, existing social norms and gender-specific constraints further reduce women’s chances of getting suitable jobs for themselves.

Based on a previous study, the present World Bank document mentions that women generally want jobs that are well-paying, close to their homes, and with flexible working hours. The report says that proximity and flexibility are sought by women while finding suitable jobs because of strong social norms around women’s chastity, marriage, work, and household duties.

The report says that the Labour Force Participation Rate (LFPR) of Indian women (27 percent) is far below that of Nepal (80 percent), Bhutan (67 percent) and Sri Lanka (35 percent). In other words, less than a third (27 percent) of Indian women aged 15 years or older are working or actively looking for a job. It says that India is an outlier with far lower female LFPR compared to most countries at the same level of income.

The country has one of the lowest female LFPR in the world, ranking 120th among the 131 countries for which data is available, and that rate has been declining since 2004-05. Its female LFPR declined 10 percentage points (pp) between 2004-05 and 2011-12 i.e. from 37 percent to 27 percent.

It should be noted that according to the International Labour Organization (ILO), LFPR is the proportion of the population aged 15 and older that is economically active: all people who supply labour (or willing to supply labour) for the production of goods and services during a specified period. The labour force is the supply of labour available for producing goods and services in an economy. It includes people who are currently employed and people who are unemployed but seeking work as well as first-time job-seekers. However, the labour force does not include everyone who work. Unpaid workers, family workers, and students are often omitted, and some countries do not count members of the armed forces.

In India, most women are into unpaid or underpaid employment i.e. they are engaged in household work or unpaid activities, which is why while calculating the female LFPR, such female workers are excluded.       

Why is female LFPR low and falling?

The present World Bank report has identified 3 proximate causes behind low and falling LFPR of women in India. They are as follows:

As a result of more of young girls continuing to educate themselves, there has been an improvement in the secondary and tertiary enrolment rates. It means that more of Indian women are staying out of the labour force in order to continue their education – secondary education and / or college & above education. The present World Bank report, however, shows that the female LFPR fell across all levels of educational attainment, and even after taking into consideration school enrolment. Female LFPR declined the most for the group with no schooling. It is mentioned in the same document that the decline in LFPR among women with a complete secondary education and college or diploma can be partly explained by continuation of education. Since continuation of education could explain only half the decline in LFPR among college graduates and diploma holders, it may indicate disguised unemployment, as young women delay their entry into the labour markets, possibly due to dearth of job prospects.

It should be mentioned here that India’s (34 percent) LFPR among highly educated women is much lower as compared to that of countries like Brazil (79 percent), Indonesia (75 percent), Bangladesh (59 percent) and Sri Lanka (53 percent). However, women are a large share of science and technology graduates (42 percent) in India as compared to that in countries like Bangladesh (36 percent), Sri Lanka (41 percent), Brazil (34 percent) and Indonesia (37 percent).

b. As areas become more urbanized, women who reside in those areas become less likely to work. There has been a dramatic fall in female LFP in rural areas, while female LFP in urban areas has stagnated at very low levels (around 20 percent). The decline of female LFP along the urban gradation is linked to the fact that women’s participation in services and industry, which are urban-centric sectors, is very low as compared to other countries, says the report. In countries like Brazil, Indonesia and Vietnam, the share of women workers in services employment is quite high as compared to that in India. The share of women in industry and services in the country is less than 20 percent.

Due to retirements, the LFPR of women goes down. Unlike Indian men, or women in other countries, women from India have been found to enter the labour market at older ages and exit early, says the document.

Why is female LFP low in industry and services sectors?

The World Bank's recent update has identified the deeper causes behind low female LFP in industry and services sectors, which can be explained by focusing either on labour supply or on labour demand. The decision to join the labour force (labour supply) depends on women’s individual preferences or her family circumstances. However, despite women's willingness to join the labour force, they may be unable to do so due to scarcity of suitable jobs i.e. lack of demand.

Among the supply side explanations behind declining female LFP, ‘income hypothesis’ is quite popular among economists. It says that at low levels of income and education, women generally work out of compulsion and are engaged in poor quality jobs, largely in the agrarian sector. As household incomes rise when the male members find jobs in industry or services (due to urbanization or rural-urban gradation), women may opt to drop out from the labour market (or labour force) as higher household incomes allow women to stay at home, which is often a preferred household choice.

Evidence, however, suggests that higher household incomes are not closely associated with declining female LFP. The low and declining LFPR of educated women is inconsistent with an economy with a growing modern services sector, says the World Bank report.

Economists have found that it is lack of suitable jobs, which is responsible for the decline in female LFPR. With a decline in farming jobs and a rapid growth in 'peri-urban areas', the present challenge is to find suitable employment opportunities for women in the country's rapidly growing small towns (large villages), says the document. In short, fewer jobs in agriculture have not been substituted by alternative jobs, which are considered suitable for women.

Although it is a fact that firms (medium-sized) in which the employer is a woman tend to employ more women, there are relatively few women entrepreneurs, partly due to lack of access to capital and business networks.

The World Bank report says that policies, which create jobs in women-friendly sectors such as apparel, or policies that help fast-growing modern service sectors absorb more educated women workers, would be particularly helpful. It asks for creating more jobs, especially regular salaried jobs that are flexible and can be safely accessed by women.


India Development Update: Unlocking Women's Potential (2017), World Bank, 29 May, 2017, please click here to access
Press Release: India’s Economic Fundamentals Remain Strong; Investment Pick-up Needed for Sustained Growth, says New World Bank Report, 29 May, 2017, please click here to access

Sharp rise in rape, molestation cases make women feel unsafe in Gurgaon -Anshika Tiwari and Shivika Jain, Hindustan Times, 20 June, 2017, please click here to access
Why India needs more women entrepreneurs,, 6 June, 2017, please click here to access 
Image Courtesy: Himanshu Joshi

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