Economics

Female Labour Force Participation in India: Why Is It So Stunted?

Recently, India has found itself in the monetary and segment conditions that would prompt an increased female workforce participation rate. Financial development has been high, averaging at 6-7% during the 1990's and 2000's. On the other hand, fertility has significantly fallen alongside the drastic rise in training of females.  However, according to the International Labour Organisation's (ILO) estimates, the female labour force participation rate (FLPR) in India has declined from 30.27% in 1990 to 20.33% in 2020. The average value of the said figure for India during the period between 1990-2020 was 27.38%, with a minimum of 20.33% (in 2020) and maximum of 31.79% (in 2005).  The average for 2020, based on 182 countries, was 51.86%. Rwanda scored the highest rate of 83.95% and Yemen the lowest at 5.69%. The FLPR for China, the country with the largest population, was 64% while for the US, it was 56.3%. Women remained underrepresented in the Indian workforce, a circumstance that has not changed in the last 30 years.  Among its neighbouring countries, India’s FLPR is shockingly the lowest, falling even behind Afghanistan and Pakistan, which had scored half of India’s rates back in 1990. Nepal has a FLPR of 83% which is an all-time high amongst all the South Asian economies, and Pakistan (India’ biggest rival) has secured a higher position by 4 points, sitting at a FLPR of 24.6%. Globally only Yemen, Iraq, Jordan, Syria, Algeria, Iran, the West Bank and Gaza have lower rates than India.  Analysis of National Sampling Survey Office (NSSO) data (1970-2018) shows that women have largely been undertaking home-based and labour intensive informal work concentrated in low-productivity sectors. During the period of 1977-2017, the proportion of women working in agriculture fell from 88.1% to 73.2% in the rural areas, while their share in the service sector rose from 35.7% to 60.7% in the urban areas. Females in the tertiary sector concentrated in professions such as teaching and nursing, which provided restricted scope for progression in their careers. However, unlike their male counterparts, females could not increase their presence in the secondary sector.  What explains low participation in India? In the last decade, fertility has declined rapidly while wages have expanded considerably, and the contribution for this goes to the high speed of development in the country. Furthermore, avenues for job seekers are not rare, except for the educated workforce where there is a distinct relative shortage. So why are more females not entering the workforce? According to a paper published in 2008, much of the discussion on the falling trends in female labour force participation has focused on four key elements:  1) rising enrolment in secondary schooling;  2) wage and sex discrimination in the workplace;  3) increase in household incomes; and  4) females engaged in either unpaid family jobs or marginal jobs.  There has been an increase in the percentage of women who have completed a minimum of secondary level education or more, particularly in rural India. The NSSO data also confirms younger women have greater aspirations to participate in the labour market than the previous generations, however, due to norms around chastity and early marriage (still heavily prevalent in the country), they are prevented from doing so. The average age of marriage for girls in rural India is around 21.7 years. Additionally, there has been a fall in participation rate of approximately 30% owing to greater demand on their time to pursue education. Post their education, absence of appropriate job availability leads to their lower participation in the workforce.  There exists a U-shaped relation between education and paid work participation, yet the rate of return for each year of education is lower for women than men in India. This relation also asserts the fact that illiterate women are forced to rely on the unorganised sector for meeting their basic needs.  Wage and sex dicrimination within the workplace is an addition amongst the above mentioned factors where females are rewarded with a lower pay and greater discrimination than their male counterparts. This is serious as it not only affects the economic growth of the nation but also speaks volume on the prevalent working conditions.  Males are awarded with a pay of more than 19% than their female colleagues. This income disparity has only narrowed by 1% in 2018 from the 20% of the preceding year. The pay inequality can be corresponded to the following factors - discriminaton and occupational decisions by females into lower paying jobs, such as clerical work. Another interesting reason for lower female workforce participation can be attributed to the fact that many educated females drop out of the workforce due the family income effect, i.e., with an increase in family earnings, the dependency on females to work fall, thereby shifting their attention towards domestic chores and child care. As a result women hailing from higher economic status are less likely to work than women belonging from lower income strata.  This gap widens when we look at the 2019 report by the Ministry of Statistics and Programme Implementation, wherein it becomes evident that the burden of unpaid labour falls on women significantly in the country. The report states that an average Indian woman spends nearly 84% of her working hours on unpaid work while the men spend 80% of their working hours on paid work.  What is the government doing? The Government has taken several steps to increase the female workforce participation rate in India.  The Ministry of Skill Development and Entrepreneurship (MSDE) has been set up for improving the involvement rate across sectors and areas. Likewise the government has also initiated the National Career Service (NCS) project which entails a digital portal to link jobseekers and businesses for work and incorporate a repository of enlarged career content.  Other steps include incorporation of the Maternity Benefit (Amendment) Act, 2017 by institutions which focuses on improvement in paid maternity leaves from 12 weeks to 26 weeks, and arrangement for compulsory crèche services in establishments having at least 50 employees; issue of an advisory to the States under the Factories Act, 1948 for allowing women workers of night shifts with sufficient safety measures.  Furthermore, to improve the employability of female labourers, numerous institutes have been set up to provide them with training ranging from vocational to industrial. Various work laws have been amended to foster a more safe and amicable work environment for women.  Laws for a fairer work environment passed by the government include:  Minimum Wage Act 1948, the wages set by the corresponding government are equally applicable to male and female workers, and therefore, the law doesn't segregate on the premise of sex. The Equal Remuneration Act 1976 provides for equal wages to be paid to employees for similar jobs, with no discrimination based on sex, class, caste or religion followed. The Protection of Women against Sexual Harassment at Workplace Act 2013 characterizes lewd behavior or sexual harassment at the workplace, and helps in the redressal of such objections. It provides shields against fake or noxious charges. However, many government policies are targeted towards the organised workforce while the  unorganised sector that homes the largest number of females has very little to no penetration of such schemes, thereby making government policies ineffective to some extent. Additionally, in several areas, these policies are only restricted to documentation, thus, never making it to actual implementation. For instance, severe expenditure cuts associated with the centrally sponsored National Crèche Scheme had led to the closure of multiple crèches across the country, thus, de-incentivising female workers who could work earlier only because of the availability of such facilities.  Moreover the government policies regularly fail to focus on the real audience. In order to avail most of the above listed benefits, there's an enormous process and cumbersome documentation requirement which excludes the illiterate or marginalised women of the country. While issues like corruption conjointly attack the system, and the welfare policies fail to deliver. Comprehensive approaches are needed In India, the gender gap in labour force participation is high and is worsening continually when looked at from a global point of view. The decline in female employment  is primarily attributed to the sharp fall in female agricultural employment, which till date employs more than 65% of the total women in the workforce; half of them working as unpaid family workers. This decline in agriculture share is not accompanied by a commensurate increase in non-agricultural activities, except for construction. Employment opportunities are very limited for women, and are solely concentrated in only a few sub-sectors, mainly in low value-added activities.  Agriculture, which is as yet the biggest employer of female labour, can be used as a wellspring of economic growth and job creation for women, if they are guaranteed possession rights and power over grounds while at the same time, movement of women is required towards the production of high value-added crops. These of course should be supplemented by other strategy measurements.  Moreover, promotion of female entrepreneurship can give way to economic elevation of women, and thus, distribution of its benefits more equitably. But lack of credit facilities in the absence of collateral, and complications of the established formalities present a major roadblock to such entrepreneurial ambitions. Self Help Groups (SHGs) can be utilised to improve access to finance, and links with formal financial institutions would enable women (especially from lower economic status) to access the market better.  Women in India face many barriers to enter the workforce, such as pre dominant socio-cultural practices, access to choice of work, poor working conditions, wage disparity, exploitation, balancing domestic and work responsibilities, and more. It is essential that policy makers adopt strategies to improve the labour market for women through gender neutral norms, education, proper infrastructure, and the creation of more opportunities.  At last, the objective isn't simply to increase the female labour force participation rate but to build opportunities for decent work and economic progression which can add to the financial strengthening of women and the economy.

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