Improving India’s women labour force participation rate

Dr. Rajesh Shukla    September 25, 2023

OPINION I The Economic Times

There is no denying that India’s record on the gender equality front is nothing to be proud of. Scores on human development indicators such as female literacy, health care, and employment, continue to lag behind comparable scores of men. Even on the issue of the number of lawmakers, India currently has only 11% women legislators whereas the global percentage is 27%.

The passage of the Women’s Reservation Bill in both houses of Parliament - which will provide one-third reservation of seats to women in the Parliament and state Assemblies - 27 years after it was first proposed comes as a landmark step. The move is expected to make Indian political leadership more inclusive while empowering women lawmakers to articulate and act upon the concerns and issues of women residing in diverse geographies and cultures ranging from metros to the countryside. It also makes India one of just 64 countries that have reserved seats for women in their Parliaments. According to the UN, studies have shown that women in leadership positions have a positive impact on “delivering policies, programmes and financing that improve the lives of women and their families, communities and ultimately their nations”.

Let’s consider the current scenario in terms of how women fare in the job market and how this is linked to the level of education they have. Estimates based on the PRICE’s countrywide ICE 3600 surveys reveal a few interesting insights.

Women account for 47% of the total population (711 million of total 1,439 million as of April 2023), they comprise 40% of the country’s total graduate population and about 30% of the total number of post-graduates.

The proportion of girls declines as we go up the education ladder. While less than a twelfth of men are illiterate, nearly a quarter of women belong to this group. As a result, nearly three-fourths of all illiterates are women. More than half of all women (55%) are non-earning housewives. At the individual level, it also implies that women have to manage personal expenditures by juggling household expenses. We gained some insights into how women do this when we asked 18+ year old women in our survey: “Do you have some amount of money to spend each month on yourself?”.  Two-thirds of the women responded with a “yes”. On asking about the source of this money, nearly 40% said they are given some money at fixed intervals by their family/husband. 27% said they earn their own money. Nearly 25% said that they keep a portion of the money for themselves after they have spent on household expenses. About 7% of women cut corners and pull out some money for themselves from within the money given to household expenditure. 

Given that men outnumber women in all education groups and have a much higher earning rate (78% of adult males earn income versus only 29% in the case of adult females), it is not surprising then that this disparity in terms of education levels between men and women has a direct bearing on women’s workforce participation level. Casual labour forms a huge chunk of the workforce with 32% of men and 17% of women engaged in this activity.

Nearly 30% of men are self-employed versus 10% of women. About 24% of men are salaried employees versus just 7% of women. The low levels of women's participation in the workforce is an issue that is of major concern as it has implications on the economic wellbeing of families and the development of the nation besides, of course, undermining women’s equality.

A closer examination of female participation in the workforce throws up interesting new developments. For instance, when comparing the level of annual median income for men and women, it is observed that currently there is income parity for illiterate men and women. This figure stands at Rs 210,000 annually. In 2004-05 women in this category were earning just 38% of what men did.  Similarly, the female-to-male earnings ratio for matriculates has improved significantly from 51% in 2004-05 to 148% today. However, the disparity is quite stark as one moves to higher education levels. For instance, the female-to-male earnings ratio for graduates has declined significantly from 74% in 2004-05 to 43% as of today. Another discouraging situation of women’s employment is that about 45% of women who hold bachelor’s and/or post-graduate degrees are either housewives or unemployed. This is a cause of concern and can be attributed to the absence of quality opportunities for eligible women in low-literate and underdeveloped states.

The impact of education on women at the lower income levels has clearly been significant and this is apparent when one looks at the rise of the Indian Aspiring Middle Class where household incomes are growing significantly. However, for employable women workforce, the absence of better opportunities could be a hindrance to the overall well-being of their households and inclusive development. The commitment to women-led inclusive and sustainable development is therefore the only way forward. In this context, the passing of the Women’s Reservation Bill demonstrates India’s commitment to women’s empowerment and is expected to be a transformative step to achieve the larger goal i.e., India’s inclusive and sustainable development.