Latest official data show that female labour force participation (FLFP) in India has declined from 33.1% in 2011-12 to 25.3% in 2017-18. The state of Bihar has the lowest FLFP in the country. To deliberate on the issue of de-feminisation of the labour force, a panel discussion was organised in December 2019 in Patna, Bihar by the International Growth Centre, in collaboration with Asian Development Research Institute (ADRI); Gender Resource Centre (GRC), Women Development Corporation, Government of Bihar; and Centre for Catalyzing Change (C3).

The panel comprised Sonalde Desai (Professor of Sociology, University of Maryland), Ashwini Deshpande (Professor of Economics, Ashoka University), Sher Singh Verick (Senior Employment Specialist, International Labour Organization), Farzana Afridi (Associate Professor of Economics, Indian Statistical Institute), Ashmita Gupta (Visiting Faculty, Asian Development Research Institute), and Nilanjana Sengupta (Technical Specialist, International Center for Research on Women). The session was moderated by Yamini Atmavilas (India Lead – Gender Equality, Bill and Melinda Gates Foundation (BMGF)) and chaired by P.P. Ghosh (ADRI).

Kicking off the discussion, Yamini Atmavilas said that when we talk about women’s economic empowerment in India, it is hard to escape the question of what is happening in the labour market and with FLFP. At the same time, economic empowerment is much more than work. We need to consider macroeconomic factors that often go missing from the debate and also the barriers on FLFP, many of which are normative. It is important to understand why it is that even when there is good policy it does not seem to translate into better outcomes for women. 

Understanding and measuring women’s work

Sonalde Desai contended that the common explanation given for declining FLFP is the rising incomes of husbands and the social norm that women should stay at home. However, FLFP is declining for rural, least educated, and the poorest women, which means that something else is going on. One possibility is that we are not measuring FLFP right in terms of women’s subsidiary status and farm work, and the decline in FLFP may actually be much smaller than we think.

Secondly, there are issues associated with jobs: there is huge concentration in farm work and men are able to move out to various occupations that are not open to women. In her view, it is important to pay attention to these structural factors before jumping to normative explanations.  

Ashwini Deshpande added that there is an implicit bias in the use of the term “labour force participation rate”, making it completely a supply-side story. If we see lower numbers of women “working” we assume that is because women have decided to withdraw from the labour force. One can think of a two-by-two table where there is paid and unpaid work on one side, and work in the house and outside the house on the other side. Even if we do not talk about domestic or care or reproductive work, these are four types of economic activities that women undertake. However, when FLFP is measured it is typically outside the home and paid, and the other three boxes get left out. Better comprehension of women’s work is required to capture this grey zone. 

Is the Indian case unique?

Sher Singh Verick presented a global perspective on these issues. In terms of the U-shaped relationship between FLFP and GDP (gross domestic product) per capita across countries, India is an outlier in that its FLFP is lower than the average at that income level. However, along with India, this is true for other South Asian countries like Bangladesh and Sri Lanka, and the Middle East and North Africa. What is a matter of concern for India – and also for Turkey – is that FLFP is falling from levels that are already quite low. Bangladesh started with low levels of FLFP and increased them a lot mostly through the garment industry but also agriculture. On the other hand, Sri Lanka has had stagnant FLFP despite improvements in human development, as job opportunities were not available for women outside of the major cities. Hence, the growth story is extremely important: the demand side and whether the whole process of structural transformation translates into more jobs for women. 

The importance of structural and demand-side factors

Farzana Afridi said that historically FLFP has been higher in rural areas than urban areas, but it has been declining in rural areas and remaining stagnant in urban areas. The decline in FLFP in rural areas is driven quite dramatically by the decline in the gender gap in educational attainment. Hence, a decline in FLFP may actually be welfare-improving if we think in terms of productivity. When women’s educational attainment goes up, their reservation wage increases and at the same time, they become more productive in home activities. They are going to compare marginal return from time spent at home versus the market, and if the jobs available are not good enough they would prefer to stay back home. Further, unemployment rates are seen to be negatively correlated with FLFP in recent data, which may be interpreted as a discouraged worker or high search cost effects. Afridi concluded by emphasising the importance of structural and demand-led factors that determine whether decent jobs at the right wages will be available to attract women to get out of the house and join the labour market.

Ashmita Gupta discussed her research that analyses the impact of trade liberalisation in India in the 1990s on employment of women by big firms. It is seen that in the new competitive regime with reduced tariffs across the board, the proportion of female employees at big firms reduced, particularly in firms that increased worker intensity in terms of working hours and shifts. The impact was greater in states where labour laws preventing women from working night shifts were implemented more strictly.

Afridi added that MNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is a public programme that has managed to have female participation by addressing the safety issue as the work is available close to where women live, and by providing them equal wages. However, this would work only for women with very low levels of education. As women go from illiteracy to primary education, they would ideally like to move from agriculture to manufacturing jobs – this is expected to hold true even more for urban areas as levels of education are slightly higher there. However, in research work in industrial areas of Delhi, it is surprising to see that women do not want to work in factories that are very close to their homes and where they can find jobs as it is low-skilled work. This is because there is a stigma attached to working in factories due to work conditions, work hours, lack of toilets for women, and so on. Both women and men prefer home-based work for women so that they can balance their domestic duties as well. Contractors do bring work from factories to women at home but the problem is that they are not even given the minimum wage for their labour. 

Role of skills

Nilanjana Sengupta said that the government is very interested in skill-building at present and the thinking is that if we invest in skills, employment will go up. There is a plethora of programmes but one problem is that these are housed in different ministries and there is a lack of coordination and cross-pollination. Now, skill programmes can either lead to entrepreneurship or wage employment. As far as wage employment is concerned, placement is typically outside the area of residence. There are various issues such as low income, bad working conditions, restricted mobility due to norms, fear of sexual harassment at work, being told she is not good enough, and so on. Hence, women either do not join the job or do not sustain in the job. On the other hand, entrepreneurship is not just a function of skills; it requires money, mentoring, peer network, information, marketing linkages. What is missing is a comprehensive programme catering to such an enabling ecosystem.

To conclude, Sengupta emphasised the importance of rights-based training that would help women overcome the years and years of social conditioning and negotiate the very masculine labour market. 

How macroeconomic policies can help

In terms of macroeconomic policy, Verick emphasised the need to look at how budgets are allocated and fiscal space is created for investing in certain sectors. According to an ILO report form 2018, if expenditure on the care sectors is doubled, there will be creation of 475 million new jobs by 2030. At the same time, this would address the constraints associated with unpaid care work that is mainly undertaken by women.

Also, it is critical to look at industrial sector policies with a gender lens, and whether public and private investment is creating more jobs that women can access. A lesson from countries that have fared well on this is that it is not a one-shot exercise; one needs to monitor the process, learn from it, and admit when certain policies do not work. In his view, in India, sectoral pilots should be conducted at the state level. 

Problems and solutions: Further insights

Regarding the nature of female employment, Desai said that we tend to mainly think about the informal sector as that is where the majority of women work. However, things are changing and the formal sector is becoming increasingly important. If we do not pay attention to this, we could be creating barriers to women’s participation in the formal sector. Rather than quota-based affirmative action for gender, we could adopt a non-discriminatory approach that involves looking at how the recruitment is done, and collecting data on who is applying and who is hired, etc.

Responding to the moderator’s question on whether State investment in girls’ education can make a difference, Gupta said that education always matters. However, when there is a negative income shock to a household, continuing education might become unaffordable and girls bear the cost disproportionately in terms of school drop-outs. Her research shows that in the poorest 25% districts, households respond by pulling girls out of school and making them spend more time on activities such as tailoring that have market substitutes. In the 25 to 50 quartile, girls remain in school and women increase their labour supply as insurance, mostly in unpaid agriculture work. This is not seen in the bottom quartile likely because those women lack the skills and resources to engage in such self-employment.

The ones that drop out of school tend to do so at the primary level. The thinking is that there is no point getting to the middle level as there are not many jobs available for that level. Gupta recommended that policy interventions should prevent people from dropping out and vocational programmes should be designed to enhance employability of those in the middle of the spectrum.

According to Sengupta, besides safety concerns, there is the issue of sexual control exercised over women by men. This is one reason why certain types of work is preferred for women such as paid domestic work in urban areas. She added that improved provision of basic services such as clean drinking water, clean fuel, etc. by the State can go a long way in easing women’s burden of domestic work.  

Finally, Sengupta highlighted three takeaways from her experience with NRLM (National Rural Livelihoods Mission) in the states of West Bengal and Madhya Pradesh: first, women’s collectives have huge potential to bring about empowerment and hence, focus on institution-building is important. Second, there is a welcome shift in approach towards skill delivery. It is more demand-based, and context-specific. Efforts are made to identify and develop the traditional occupations and skills of a particular region. Third, more than entrepreneurship, women are taking up work with various government programmes such as MNREGA, midday meal schemes, etc. Even though compensation is low, these programmes give them a sense of legitimacy and dignity.