The Alarming Drop in the Female Labour Force Participation in India

As Amartya Sen notes, “women can become agents of change if four conditions are fulfilled: they acquire more than basic education; they have legal rights of ownership of property; they have an independent source of income; and finally, they can work outside the home. In India, most rural and perhaps the majority of urban women have begun to enjoy only the first of these conditions, and that too only in recent decades. The remaining three conditions still remain absent. Not surprisingly, India ranks very low on any indicator of gender equality in the world.”

In December 2019, India slipped four places on the Global Gender Gap Index 2020 released by the World Economic Forum – from 108 to 112. India now ranks behind its neighbours China, Sri Lanka, Nepal and Bangladesh. In terms of women’s health and participation in economy, India ranked among the bottom five countries 

Unsurprisingly, this coincides with an all-time low labour force participation amongst women in India. The labour force participation rate is defined as the percentage of working population between the age-group of 16 and 64, currently employed or seeking employment in the economy. The female labour force participation rate indicates what percentage of women within the working age (16-64 years) population that are currently employed, or are seeking employment. 

According to the data released by the World Bank in June 2020, India’s female labour force participation (FLFP) is the lowest in South Asia. The only countries to have performed worse are Yemen, Iraq, Jordan, Syria, Algeria, Iran, West Bank and Gaza. From 30.3% in 1990, India’s FLFP dropped to 20.3% percent in 2020, falling behind Pakistan and Afghanistan, which were at 22.2% and 21.8% respectively. In 1990, the FLFP in Pakistan and Afghanistan stood at 14% and 15% respectively. 

Even in 2011-12, the FLFP rate in India was a low 23%, at a time when the economy had been growing at an unprecedented rate. The GDP growth rate of India averaged 8.4% per annum between 2003-04 and 2010-11, but the labour force participation of women continued to decline. 

The following graph shows the FLFP rates India, China, Bangladesh, Saudi Arabia, and the United States between 1990 and 2020. 

Female Labour Force Participation rate (% of female population aged 15+) 

Source: World Bank data 

The already falling labour force participation of women in India has been hit further by the COVID-19 pandemic, which has resulted in widespread job losses across the board. In October 2020, Professor Arun Kumar had estimated the job losses to have reached 200 million. 

According to reports, women’s share in new payroll additions fell below the 20%  mark in August 2020, down from 23% in 2019-20. Payroll data collected from Employees’ Provident Fund Organisation (EPFO) highlights that out of the 6,69,914 people who joined the formal workforce in August, only 19.98% were females --  down from 20.49% in July and 21.11% per cent in June. New research indicates that during ‘post-COVID recovery,’ while men have gradually returned to work, women have lagged behind. Research by Professor Ashwini Deshpande from Ashoka University shows that the majority of those most-affected by the pandemic have been women with young children and rural women. 

According to the Periodic Labour Force Survey (PLFS) data for 2017-18, there has been a fall of seven per cent in work participation rates (WPR) among rural women, declining from 24.8% to 17.5%. This reflects an absolute drop of close to 25 million rural women workers since 2011-12 (and a drop of 47 million rural women workers since 2004-05). The fall in WPR amongst women from Scheduled Castes and Scheduled Tribes communities between 2011-12 and 2017-18 is close to ten percentage points. An article in the EPW attributed this ‘historically unprecedented eviction of women from the rural workforce’ to the negative impacts of neo-liberalism’s growth paradigm marked with an aggravating agrarian and employment crisis. 

In urban India, FLFP rates have stagnated at 18% since the 1980s. Existing research holds the following factors to be responsible for this stagnation: 1) rising educational enrolment of young women 2) lack of employment opportunities 3) effect of increase in household income on participation. 

Despite an increase in the enrolment for education amongst girls in the last decade, there has not been a commensurate increase in labour participation rate of women in general, and in urban women, in particular. The standard economic model suggests that rising education levels and economic growth should draw more women into labour force. However, a parallel increase in household income in the last two decades has meant a pulling back of women from the labour market. This is owing to the predominant conservative notion that if the income of the man is enough to sustain the household, women are no longer expected to work out of the household.

 Analysis of NSSO data (1970-2018) reveals that female work participation rates are lower for higher expenditure categories, particularly in rural areas. Moreover, continuing wage differentials between men and women means that women are incentivised to withdraw as men continue to work. Over the last three decades, the female wage has remained around 60% to 65% percent of the male wage. This phenomena of decline in female participation in labour market alongside overall growth and rising female education has also been observed in the Middle East and North Africa. 

In India, the high growth rate during the second half of the 2000s did not translate into an increase in employment – a phenomena called jobless growth. This was a result of a partial transition from an agrarian economy to an economy based on an increasing share of industry and services. A desirable transition would have required the share of agriculture in output to have plunged alongside a corresponding escalation in share of industry and services. In case of India, while the share of agriculture as part of the Gross Domestic Product has declined to 16% percent, about 50% of the workforce continues to be dependent on agriculture for their livelihood. 

While the share of output generated by industry and services has increased in the last two decades, the share of employment remains low. The phenomenon of jobless growth has had a more pronounced impact on women. In February 2012, in his speech to the Indian Labour Conference, Prime Minister Manmohan Singh noted, “One of the most under-utilized resources in our country is our women. Female labour force participation rates are extremely low in our country and have remained more or less constant over the past decades. In order to bring more women into the work force, it is necessary to understand the constraints that they face in balancing their family and work responsibilities.” 

Finally, there is the question of unpaid work by women. Due to societal and cultural expectations, women are expected to prioritise domestic work. According to National Sample Survey 2011-12, over 90% of women who did not work reported that they were primarily engaged in domestic duties. 

Economist Jayati Ghosh argues, “practices of gender discrimination, along with other forms of social discrimination, are not simply “backward” practices that will be washed away by capitalist progress, but rather have become the base on which the economic accumulation process rests.” Capitalism in India has adapted to utilise existing structures of discrimination and social division to further extraction of surplus and ensure greater flexibility and bargaining power over workers. 

Ghosh further argued that the basic feature of Indian economic development thus far has been exclusion – exclusion from control over assets; exclusion from benefits of economic growth; exclusion from the impact of physical education and social infrastructure expansion; exclusion from education and from income-generating opportunities. This exclusion functions along the axes of class, caste, community and also gender. Exclusion from benefits has been realised not by way of exclusion from the markets, but, in fact, by way of incorporation into the market system, facilitating capital accumulation across the world. This explains the paradoxical trajectory of high aggregate growth with inadequate employment generation in India. 

In February 1920, Lenin wrote, “We want women workers to achieve equality with men workers not only in law, but in life as well. For this, it is essential that women workers take an ever-increasing part in the administration of public enterprises and in the administration of the state.” Over a century later, years since, the cocktail of a neoliberal paradigm and cultural conservatism in India has pushed the agenda of equality farther than is being imagined in popular discourse. The falling graph of labour force participation of women tells us the poignant story of aggravating inequalities and exploitation in India.

The writer is a researcher with Tricontinental: Institute of Social Research. The views are personal. She can be reached on Twitter @ShinzaniJain