Numerous studies have now confirmed that Indian women are leaving the labour force in India. This is a puzzle for a fast growing economy where conventional wisdom would suggest that women should be entering the labour force. When compared with other countries in the region India has one of the lowest labour force participation rates (LFPR) for women at 30 per cent behind Bangladesh (60 per cent) with only Pakistan and Afghanistan lagging behind.
Labour force participation in India is also characterised by a large inequity between men and women. In 2012, the LFPR for men was 82.7 per cent versus 33.1 per cent for women. A study by the World Bank suggests that over a seven year period; 2005-2012, almost 35 to 40 million women who should have been part of the labour force were 'missing'. Even as men's participation during this period rose slightly women continued to leave the workforce. Earlier this year Christine Lagarde of the IMF famously stated that India's GDP could be raised by 27 per cent if the country achieved gender parity in the workforce.
A study from NILERD (and the corresponding table) shows us that the total labour force in India has increased by only 100 million people over less than 20 years. As of 2012 the labour force stands at 484.4 million people, it rose sharply to 469 million till 2005 and then stagnated and increased only marginally. In the years between 1991-2005, 61 million people entered the labour force or about 12 million a year, however from 2005 to 2012 only 2 million people entered the labour force annually. If we look at the numbers between 2012 and 2014 the labour force increased by 14 million workers showing a slight overall increase in the annual rate but nowhere near the 12 million a year in the 1990s. Close to half of the Indian labour force is employed in the agricultural sector at 231 million (48 per cent) with services accounting for the next highest number at 127 million (26.25).
The same study attributed the decline to increasing enrolment in education, reduction in child labour, women's work in the home and mechanisation in agriculture. These trends are also reflected in the employment elasticity of output in the table below for example agriculture where the majority of people work is -.53.
A study on the long-term trends of women's employment over a 25-year period that have shown a downward trend for rural women while urban employment has remained fairly stagnant. Rural employment accounts for over 80 per cent of all women's employment in India.
A recent study disaggregating women's employment by social group by Neetha N. at CWDS shows that all women have seen a decline in workforce participation between 1999 and 2012 but that some women are worse off. The overall contraction for urban and rural women was -3.8 per cent between 1999 and 2012. When disaggregated by social status upper caste and Muslim women have seen a marginal decline of -1.9 per cent and -.4 per cent when compared with Schedule Tribe 6.4 per cent, Schedule Caste 5.7 per cent and Other Backward Caste 5.1 per cent. Inequity in labour force participation is not just between men and women but also amongst different social groups within women.
Women's employment in India shows a departure from the economic development theories premised on the thesis of greater demand for women's wage labour with economic growth. Instead, during the period of high growth in the Indian economy, women's work has contracted and never fully recovered. This poses a real challenge for policy makers in thinking about the economic advancement of women.
BW Reporters
The author is Executive Editor of Public Policy at BW Businessworld
