The female labour force participation (FLFP) rate in India declined, by and large, since the first quinquennial Employment-Unemployment Survey (EUS) of the National Sample Survey (NSS) in 1972/73 until 2017/18. There were brief increases during 1983-1987/88, 1999/2000 and 2004/05, periods marked by agrarian distress.
The decline in the FLFP rate has largely been on account of the decrease observed in rural India, while the rate in urban areas has remained stable. The FLFP rate (for all ages) in rural India declined from 33.3% in 2004/05 to 25.3% in 2011/12, and further declined to 18.2% in 2017/18.
However, in recent years, the FLFP in rural India has seen a turnaround, with an increase in the FLFP rate (for all ages) from 18.2% in 2017-18 to 30.5% in 2022-23 (PLFS 2022/23).
This period is marred by a significant health and economic crisis due to the COVID-19 pandemic. The Indian economy has been experiencing a slowdown in the past decade, initially due to the non-performing asset crisis and later because of demonetisation and the implementation of the Goods and Services Tax.
The growth rate in the agriculture sector fell consecutively in 2017/18 and 2018/19, and by late 2018, consumption and investment growth also declined. The slowdown was further exacerbated by the pandemic.
In this context, let’s try to understand the recent rise in the FLFP rate by analysing it across employment status, education levels and socioeconomic dimensions like caste and expenditure class.
First, the NSS categorises workers into three broad categories based on their employment status. These categories are self-employed, regular wage/salaried employee and casual labour.
Within the self-employed category, there are two sub-categories: i) own account worker and employer and ii) unpaid helper in household enterprises. Own account workers are those who operate their enterprises on their own or with one or few partners without hiring any labour, while employers are those who work on their own account or with one or more partners and run their enterprise by hiring labour.
Between 2017/18 and 2022/23, the proportion of casual labour among all women workers decreased without any corresponding increase in the proportion of regular wage/salaried women. The share of self-employed women constituting own account workers/employers and unpaid helpers has increased by around 13% during the same period (Fig.1).
The increase in the proportion of self-employed women is observed across all sectors, including agriculture, manufacturing and services.
Between 2017/18 and 2019/20, the rise in the participation of women was driven by an increase in the share of helpers in household enterprises, while the share of own account workers remained largely stable.
However, from 2019/20 to 2022/23, which included the period during and after the pandemic, the increase in women’s participation rate was primarily due to an increase in the share of own account workers (Fig.1).
This increase in the proportion of own account women workers may partly be an outcome of the large exodus of male migrants returning to their villages during the pandemic, with women in the household joining ‘own-farm activities’ or other non-farm activities to support household income.
Interestingly, the increase in the FLFP rate in rural India between 1999/00 and 2004/05 was also driven by an increase in the percentage of self-employed women. During this period, the share of self-employed women increased from 57% to 63.7%, while the proportion of women who are casual labour decreased from 39.6% to 32.6%.
The proportion of regular wage/salaried women rose marginally by less than one percentage point between 1999/00 and 2004/05 (NSS-EUS 2004/05).
Chart by author.
Second, there is a U-shaped relationship between education and FLFP rate in any given year. The FLFP rate is generally higher among women with little or no education. As the level of education increases, the FLFP rate declines, before eventually rising for highly educated women.
The U-shape hypothesis states that among the poorest with no or very little education, women are forced to work to survive and can combine farm work with domestic duties, while among the highly educated, high wages induce women to work and stigmas associated with female employment in white-collar jobs are low.
For instance, between 2017/18 and 2022/23, the FLFP rate for illiterate women increased from 29.1% to 48.1%, while it increased from 49.2% to 52.2% for women with post-graduate or higher education.
During the same period, the FLFP rate increased from 10.3% to 30.7% for women with secondary education.
The increase in the FLFP rate in rural India is observed among all education categories. However, the extent of the increase in rural India is higher among women with lower education levels than with relatively high education levels (Fig.2).
Source: Periodic Labour Force Survey, various rounds. Chart by author.
Third, we look at the FLFP rate among four categories: scheduled tribe (ST), scheduled caste (SC), other backward class (OBC) and the rest, referred to as ‘others’.
The FLFP rate is higher among ST women compared to women belonging to other caste groups. Between 2017/18 and 2022/23, the FLFP rate rose across all caste groups with ST women experiencing the highest increase of 17.6% followed by OBC, SC and others.
The FLFP rate for ST women increased from 27.6% in 2017/18 to 45.2% in 2022/23, while it increased from 15% to 21.5% for women in the ‘others’ category (Fig.3).
Fourth, the FLFP rate is relatively high among the upper expenditure classes than the lower expenditure classes. These expenditure classes are based on the usual monthly per capita consumer expenditure (UMPCE).
Further, the FLFP rate has increased across all expenditure classes, but the extent of increase is highest among the richest two deciles and lowest among the bottom 10%.
In a way, the relatively large increase in the FLFP rate among the upper expenditure classes challenges the income effect hypothesis. The main idea of the income effect hypothesis is that with rising household income, women withdraw from the labour market. But Kannan and Raveendran (2012) found that a large number of women who withdrew from the labour market between 2004/05 and 2011/12 were from economically poor households.
The recent increase in the FLFP rate has also happened more among the upper expenditure classes than the lower expenditure classes (Fig.4).
Across all deciles, the proportion of self-employed women workers has increased with marginal changes in the proportion of regular wage/salaried workers or casually employed women workers. The proportion of self-employed women workers in the first decile class increased slightly from 9.6% in 2017/18 to 12.6% in 2021/22, while it increased from 10.3% to 21.7% for the richest decile class.
While the UMPCE doesn’t fully capture class differences, it still offers interesting insights. It is largely the upper expenditure classes who are able to increase their participation by engaging in self-employment activities (Figs. 5 & 6).
Source: Periodic Labour Force Survey, various rounds. Chart by author.
Source: Periodic Labour Force Survey, various rounds. Chart by author.
Source: Periodic Labour Force Survey, various rounds. Chart by author.
Source: Periodic Labour Force Survey, various rounds. Chart by author.
The way forward
The recent increase in female labour force participation is distress-driven and is nothing unusual compared to the previous periods when the participation rate of women rose. However, the recent increase is broad-based, with the proportion of self-employed women rising across all sectors, including agriculture, manufacturing and services.
This increase is observed across all caste and class groups, as well as across all levels of education, though the degree of increase varies. The highest increase in the participation rate is observed among vulnerable groups, including ST women and relatively less educated women, underpinning the distress and necessity-driven nature of participation.
Notably, female labour force participation has grown significantly more among the upper expenditure classes than the lower ones. The increase in participation was driven by an increase in the proportion of self-employed women, which increased significantly more for upper expenditure classes than lower expenditure classes.
This indicates that it is mostly the upper expenditure classes who can rely on household agriculture or other activities in distress times, while the lower expenditure classes still have to look for paid opportunities as agricultural labourers or in the non-farm sector.
Having said that, women in rural India continue to bear a disproportionate burden of domestic responsibilities. According to the 2019 Time Use Survey, rural women in India spend an average of around five hours per day on unpaid domestic services, compared to only 1.5 hours by men.
Women also spend around two hours per day on care activities, compared to around 70 minutes by men.
To increase and sustain the higher participation of women in the labour force, public provision of care services, equal division of labour at home and decent job opportunities in the non-farm sector will be essential in the long run.
Sapna Goel is assistant professor in the economics department at the University of Delhi’s Hindu College.
