Given rising aspirations, and rising indebtedness, it remains a puzzle as to why India’s female labour participation rates are dipping in the manner they are.
Given rising aspirations, and rising indebtedness, it remains a puzzle as to why India’s female labour participation rates are dipping in the manner they are. While it is true women in rural areas work less as family incomes go up, this seems to be true of even urban areas where there are more job opportunities. So, while a greater proportion of more educated women work in comparison—a higher proportion of graduate women work as compared to school pass-outs—participation rates have fallen across the board. Between 2004-05 and 2011-12, female participation rates fell by 12.3 percentage points (ppt) for the illiterate group in rural areas, 9.4 ppt for those who have completed secondary schooling and 13 ppt for those who had college degrees. According to a World Bank study, were India’s female labour participation rates to be similar to even Sri Lanka’s, this would add 0.4 ppt to GDP growth by 2020.
One of the main constraints, the World Bank study points out, is the lack of suitable jobs for women. Suitable jobs are those that have flexibility as well as safety and a shorter travel duration—also, in many cases, the jobs didn’t offer the kind of salaries that women expected—as compared to other countries, India seems to have a higher proportion of women who are science and technology graduates. That, of course, ties in with the overall jobs shortage India has been witnessing for a long time—with the formal sector creating less jobs, even the limited jobs creation is restricted to the informal sector where salaries tend to be lower and hours of work longer. An enterprise survey carried out by the World Bank in Madhya Pradesh found that just 40 of the 618 units interviewed offered maternity benefits and, among those that did, just two out of five paid salaries during leave—only seven firms offered child-care facilities. The World Bank also found that states with more flexible labour laws tended to have higher female labour participation rates, from Bihar at one end with very poor labour conditions to Sikkim as the best. Going forward, if female participation is to increase, India has to try to create jobs that offer such flexibility; creating better infrastructure, such as metros, will also help as that makes commutes easier. More important, the attempt has to be to simplify labour laws and to remove hurdles to more formal sector employment. Not allowing firms to shut down easily, for instance, drives more informal employment, as does high EPFO/ESI payouts each month.