Markets, marriage, and norms: Understanding female labour force participation in India

Despite recent gains in India’s female labour force participation rate due to rural self-employment, women’s work in the country remains constrained by factors on both the demand and supply side. In this post, Farzana Afridi highlights key insights from economic research, and outlines areas for future work – such that policy can further the agenda of meaningfully enhancing women’s economic engagement.

There has been a dramatic increase in women's labour supply in the US and several developed countries since the beginning of the 20^thcentury (Goldin 2006). During this period, female labour force participation (FLFP) increased by almost 70 percentage points, driven by expanded access to education, lower gender wage gap, and technology that enabled greater control over fertility and reduced time spent on household production activities (Greenwood et al. 2005).

In contrast with the Western experience, similar socio economic transitions have not necessarily lowered the gap between female and male labour force participation in India. FLFP remains low despite rising education, falling fertility, and high economic growth. Consequently, the gender gap in workforce participation remains wide, especially in urban areas (Klasen and Pieters 2015). Married women, in particular, have shown very low levels of labour force participation – a statistic that has remained largely unchanged over the last few decades (Afridi et al. 2018).

Between 2017 and 2024, however, FLFP in India has increased by almost 20 percentage points. Almost all of this can be explained by the sharp increase in self-employment among rural women during this period, primarily in the agriculture sector. Despite this, the gender gap in labour force participation looms large at almost 40 percentage points, and the quality of work being done by women remains a concern.

Explaining the gender gap in labour force participation in India

Gender gaps in labour force participation can be explained by both supply-side (individual- or household-level determinants) and demand-side factors (employer- and market-driven determinants) (Heath et al. 2024).

Supply-side factors

On the supply side, gender norms that disproportionately burden women with domestic and care work – generating stigma, reinforcing social status concerns, and inhibiting female social networks – are the primary impediments to women’s economic engagement.

Bernhardt et al. (2018) show that women whose husbands dislike them working outside the home spend less time in market work. Alternatively, women who were previously not working may enter the labour market as their bargaining power rises, reducing the weight they place on their husband’s dislike of having a working wife (Field et al. 2021).

However, women’s participation in market work may rise only when wages are high enough to offset the stigma against longer working hours (Field et al. 2021, Heath and Tan 2020). Thus, increased bargaining power – through better outside options – may reduce working hours (intensive margin), even as participation rates rise, when norms against women working are strong.

In some contexts, higher female labour supply can increase domestic violence, as husbands seek to counteract women’s increased bargaining power (Heath 2014). Moreover, among upper-caste households in India, married women’s leisure can often be a form of status-building by households (Eswaran et al. 2013).

Married women in India spend little time in the labour market despite higher levels of education due to increasing returns to home productivity relative to the market returns (Afridi et al. 2024), indicating social preferences related to the time allocation of married women. In addition, the work penalty is less attributable to motherhood and more due to marriage – women may make labour market choices, such as taking up low paying, ‘feminine’ jobs, with an eye on improving their prospects in the marriage market (Afridi et al. 2025).

Furthermore, inefficient home production technology can exacerbate women’s domestic workload. In the US, time-saving cooking technologies – enabled by cleaner fuels – were widely adopted as their costs fell and women’s labour market opportunities grew (Dinkelman and Ngai 2022). In rural India, women spend a significant amount of time collecting and cooking with solid fuels, either due to financial constraints that limit the adoption of new technologies, poor public infrastructure, or both (Afridi et al. 2023b, Afridi et al. 2021).

Gender norms also often restrict women’s physical mobility due to concerns of ‘sexual purity’, especially where the risk of harassment in public spaces is high (Chakraborty et al. 2018). Social networks are gender segregated, with female ties more likely to be with relatives or neighbours, while male networks are broader (Afridi et al. 2023c). This reduces women’s access to job information and referrals.

Demand-side factors

Less research exists on the role of demand-side factors – such as workplace practices and employer discrimination – partly because establishing causality is challenging and often requires a general equilibrium, dynamic framework to assess impacts on FLFP.

Goldin (2006) highlights that increasing women’s education must go hand in hand with creating better job opportunities. While the share of agricultural employment has shrunk in India, informal services have grown, offering few high-status, high-wage roles. Stigma may persist where formal sector opportunities are scarce, explaining the continued combination of low LFPR, occupational segregation, and large gender pay gaps. In short, raising the demand for women’s labour in the formal sector may be the missing piece in transforming women’s economic engagement in India.

Deshpande and Singh (2024) suggest that supply-side factors account for a smaller share of the FLFP decline between 1999 and 2011 in India, pointing to the importance of demand-side factors. Indeed, Afridi et al. (2023a) find that rising mechanisation in agriculture reduced the demand for women’s labour, with no such adverse effect for men during this period.

Gender-based employer bias and discrimination is less researched in the Indian context. Chaturvedi et al. (2025) documents gendered language usage in job ads in India, steering applicants towards jobs that reinforce the occupational segregation of women. Deshpande and Singh (2021) show that there is no sharp drop in women’s labour force participation around childbirth, suggesting that low participation may instead be due to the lack of steady, gainful employment for women post childbirth.

Demand-side factors are thus often intertwined with the social norms against women’s work. However, both supply- and demand-side factors can act simultaneously to lower the equilibrium level of women’s involvement in the economy.

Boosting women’s labour force participation in India: Policy insights from economic research

Supply-side levers: Lowering the social cost of market work

Given that social norms are sticky and often immutable, there is a need for interventions that circumvent or reduce the social costs associated with women working. In West Bengal, an experiment offering flexible work options showed that women’s uptake of jobs in urban areas increases when they can work from home (Ho et al. 2024).

Preliminary findings from recent research show that subsidised access to more efficient home production technologies may have boosted FLFP but only modestly (Nandwani and Jain 2024). Recent work also suggests that subsidised access to public transport may marginally increase women’s time on market work (Dasgupta and Datta 2023).

While skill training can increase entrepreneurship amongst women who are less socially constrained, such as Hindu versus Muslim women (Field et al. 2010), women’s networks play a major role in this process. Field et al. (2016) shows that business training raised household incomes and reduced the likelihood of women identifying as housewives when women attended training with a friend.

Thus, most interventions find impacts on home-based, self-employment of women – due to the flexibility to balance income generation with domestic responsibilities that circumvent mobility and social restrictions on married women’s outside work (Afridi et al. 2023c). These interventions also point to the importance of leveraging women’s networks and improving their financial inclusion in order to increase their economic engagement.

Demand-side levers: Raising demand for women’s labour

Workfare programmes such as MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) – which provide work close to home, mandate that one-third of workers be women, and ensure gender pay parity – have increased women’s participation where State capacity is strong, as in Andhra Pradesh. This impact is even greater when wages are paid directly into women’s bank accounts (Field et al. 2021).

Employer and workplace practices also matter. Adhvaryu et al. (2018) shows that soft-skills training for male supervisors in garment factories improved productivity and reduced turnover, benefitting predominantly the female frontline workforce. On the other hand, while formal sector benefits like childcare show strong positive effects globally (Blau and Currie 2006), recent research on India suggests that maternity leave mandates can reduce employer demand for women (Banerjee et al. 2022).

Future research on female labour force participation in India

While the first and second generation of research on FLFP in India has primarily focused on the extensive margins, new research is emerging on the intensive margins of women’s work and their quality of work in India. There is a slow but definite shift in the discourse from asking whether women do any work to focusing on women’s labour earnings, career progression, and occupational segregation. To further this agenda, more research on work place practices, the design of public policies and public-private financing of employer benefits, and the role of public infrastructure in enhancing women’s mobility, is needed. The challenge of moving women out of home-based work – a fall-back option – to work outside the home remains. Only by tackling both supply and demand constraints can India raise women’s economic engagement meaningfully

This article first appeared on VoxDev.

The views expressed in this post are solely those of the author and do not necessarily reflect those of the I4I Editorial Board.