India needs to narrow the gender gap and have more women in labour market to fully harness the benefits of demographic dividend, said an International Monetary Fund (IMF) Working Paper.
“A number of policy initiatives can help boost female economic participation in the states of India, including increased labour market flexibility, investment in infrastructure, and enhanced social spending,” it said.
The Paper titled — Women workers in India: why so few among so many?– gives a patterns of female participation in formal and informal sector in India. The Paper was released coinciding with the India visit of IMF chief Christine Lagarde.
Observing that female labour force participation in India is lower than many other emerging market economies, it said the gender gap should be narrowed.
“There is a large gap in the labour force participation rates of men and women in India. This gender gap should be narrowed to fully harness India’s demographic dividend,” the paper said, adding greater economic participation of women leads to higher economic growth.
Addressing a lecture earlier in the day, Lagarde had said: “Tapping the potential of women can be a game changer in many countries… India is no different”.
The International Monetary Fund (IMF) Paper suggested some policy initiatives to address the gender gap in Indian labour force participation.
These include increased labour market flexibility (which could lead to the creation of more formal sector jobs) allowing more women, many of whom are working in the informal sector, to be employed in the formal sector.
It also called for supply-side reforms to improve infrastructure and address other constraints to job creation could also enable more women to enter the labour force.
Finally, higher social spending, including investment in education, can also lead to higher female labour force participation by boosting female stocks of human capital, the Paper added.