Why are there fewer women in the workforce today?

The female employment rate in India, counting both the formal and informal economy, has tumbled from an already-low 35% in 2005 to 26% in 2018, wrote The Economist last year.
“Women are less likely to work (In India) than they are in any country in the G20, except for Saudi Arabia,” said the article, citing data from a Deloitte report.

A more recent official survey, the release of which was withheld by the government, prompting two members of the National Statistical Commission to resign, shows female participation in the workforce has dec­lined further to 23.3 per cent.

It also shows that in the youth (15-29 years) category, their participation has dropped from 37.1 per cent in 2004-05 and 24.4 per cent in 2011-12 to just 16.4 per cent in 2017-18.

“India’s female labour force participation has declined precipitously over the last two decades,” writes Rahul Lahoti, Assistant Professor of Economics, Azim Premji University in the State of Working India (SWI) 2018, released last year.

As per the International Labour Organisation’s international database, ILOSTAT, India ranks 121 out of 131 countries in this respect, reads the following sentence of the report.
This is counter-intuitive to other economic trends, Lahoti points out, as this period saw an average GDP growth rate of 6 to 7 per cent per annum, a fertility rate decline from 3.9 in 1990 to 2.6 in 2011 and an increase in the years of schooling among females. These factors would ordinarily add more women to the workforce in other countries, so why not in India?

1. Patriarchial value systems

Studies have shown that a negative status symbol is attached to a woman working in patriarchal societies as women are considered to be reserve labour force to be used only in times of distress.

2. Higher education is more important than secondary education

Women who are college-educated or have a graduate degree are more likely to join the workforce. Only a small fraction of Indian women have attained higher education. “Educated women might be dropping out of the labour force as their productivity in household work – specifically raising children – increases. Another argument is that secondary educated women do not want to jobs requiring ‘menial’ physical labour but do not have the skills to do other white collar jobs in the service sector. Marriage and having children also reduces the likelihood of women participating in the labour market,” writes Rahul.

3. Women workers have also had a difficult time moving out of the rapidly shrinking agricultural sector and obtaining other non-agricultural jobs

“This is because female-friendly labour-intensive jobs have seen less growth in India, especially in rural areas. The lack of shift in the Indian economy towards manufacturing and the low share of women in the manufacturing sector have hurt the chances of women finding paid work outside agriculture. Displacement from agriculture and lack of opportunities in the non-farm sector have thus acted together. Also agricultural work provides flexibility for women to manage work, household and care responsibilities, which other jobs (if available) do not provide. In a patriarchal society with little sharing of household responsibilities between men and women, the lack of flexibility in non-agriculture jobs acts a big deterrent for women to go outside the household and work,“ explains Rahul in SWI 2018.

Other economists and scholars have given different reasons for the declines.

For instance, Bina Agarwal, professor of development economics and environment, University of Manchester, looked at the latest leaked NSSO employment data and found a peculiar trend as she noticed an almost three-fold rise in unemployment rates for young rural women (15-29 yrs), from 4.8 per cent in 2011-12 to 13.6 per cent in 2017-18.

“This reinforces what gender economists have long been saying--that women want to work, but lack jobs. The 2011-12 NSS found that 32 per cent of rural women engaged in domestic activities were willing to work, if they found suitable jobs. The much-discussed low labour force participation among Indian women is not due to cultural norms, dom­estic work burdens and undercounting. It’s increasingly due to lack of jobs. Planning for female employment must also include safe transport and hostels near workplaces,” she told Outlook magazine.

The writing on the wall, all numbers aside is pretty straightforward. Female labor participation rate is an important driver (and outcome) of growth and development. Low levels of female labour force participation can have negative economic effects, reducing potential growth rates.

If India wants to succeed, it can’t leave it’s women behind.