Women and Work in India: Trends and Analysis

We outline the various trends surrounding women and work in India. From the glass ceilings and skewed employment statistics to unjustifiable pay gaps, the odds in the Indian employment landscape are inevitably against women. We establish a rationale as to why in the long-term, gender discrimination at the workplace is detrimental to India’s economic growth objective, both at micro and macro levels. Lastly, we list the various laws in place in India for protecting women’s rights at the workplace.

Sustained periods of high economic growth since the early 1990s, characterized by the “New Economic Policy” that liberalized the business landscape, allowed India to effectively leap from the much dreaded “Hindu rate of growth” and bring significant changes to the lives of the Indian workforce. However, the growth trajectory has been lopsided towards a “preferred gender”. Be it the crystallized glass ceilings, the unexplainable pay gaps, unconscious biases, or lack of basic amenities like separate toilets, India is still a long way from realizing its much hyped demographic dividend. 

It is surprising to see that India’s female labor force participation rate (LFPR), which refer to women who are either working or looking for a job, has not only stagnated at much below the global average of 47 percent for several years but has declined considerably in recent years. Despite experiencing structural improvements to their lives, such as decline in fertility rates and expansion of women’s education, India’s female LFPR is on a downward track. As per World Bank estimates, the female labor participation rate in India fell to 20.3 percent in 2019 – from more than 26 percent in 2005 and 31.9 percent in 1983. This is much lower, even when compared with 30.5 percent in neighboring Bangladesh and 33.7 percent in Sri Lanka.

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This decline in female LFPR can be attributed to various factors like obligations towards the performance of domestic duties, conservative social norms, and the lack of flexible work models. It is also observed that household constraints trump financial need and individual preferences for job choice among women.

This bleak scenario of women’s workforce participation having slid towards regression could, however, take a positive turn. The COVID-19 and post-pandemic hybrid work models could become game-changers for many women – offering flexible and more innovative work options with increasingly empathetic work cultures. Such new work models may improve gender diversity at work, in traditional organizations as well as in the gig economy.

India’s female labor force participation: Trends and analysis

According to annual bulletin of Periodic Labor Force Survey (PLFS) 2019-20 data, the female labor force participation in India is way below that of males. In FY 2020, while the male participation rate stood at 56.8 percent, this ratio was merely 22.2 percent for females. The latest quarterly PLFS surveys suggest a further decline. In the January-March 2021 quarter, this stood at 16.9 percent, with states like Himachal Pradesh (29.6), Andhra Pradesh (23.1), Tamil Nadu (24.2), Kerala (19.5), and West Bengal (19.5) being some of the top performers. The state of Bihar remained the worst performer with a 4.4 percent participation rate, following Delhi at 8.8 percent and Uttar Pradesh at 9.7 percent.

Juxtaposed to the male workforce participation rate during the same period, which was 57.5 percent, the stark gender inequality is evident.

A further analysis reveals a greater rural-urban divide within already existing complexities. As per annual bulletin of 2019-20 PLFS survey findings, the rural female workforce participation was 24.7 percent while the corresponding urban rate was 18.5 percent. This rural-urban divide is not as high with respect to males. The male participation stood at 56.3 percent and 57.8 percent in rural and urban areas, respectively.

Another noticeable trend is that the female labor force is vulnerable to maximum distortions and impact in the face of adversity. The recent quarterly PLFS statistics suggest a considerable decline in female LFPR post the COVID-19 pandemic. The participation rate, which was 17.1 percent before the pandemic hit, fell to a record low of 15.5 percent in the April-June 2020 quarter when strict movement curbs were imposed. A research paper by Azim Premji University on the gendered impact of the COVID-19 pandemic on India’s labor market said that compared with men, women were seven times more likely to lose work during the nationwide lockdown and eleven times more likely to not return to work subsequently.

Occupational and sectoral analysis of female workforce participation

Occupational trend statistics reveal that female employment in professional and technical roles is much higher in urban areas as compared to males. However, their participation in legislative, official, and managerial roles remained much lower at 11.7 percent as compared to males (17.8 percent) in urban areas.

In rural areas too, female participation remained higher than males in technical and associate professional roles at 2.9 percent as compared to 2.1 percent among males. At the same time, female participation in official, managerial, and professional roles remained low.

An investigation into the statistics of the Indian workforce according to employment type reveals that in urban areas, the share of salaried / wage earning females in is more than males. In rural areas, participation of self-employed females is higher than that of males. Employment in casual labor is almost at par for both the genders in rural areas, while it is slightly higher for males in urban areas.

Another interesting trend to note is that in rural areas, female workforce participation is the maximum in agriculture, followed by manufacturing, construction, trade, and the hospitality industry.

Whereas in urban areas, female workforce participation is the maximum in manufacturing, followed by hospitality, construction and transport, storage and communications.

Within the self-employed category, where the employment share of females is highest at 63 percent in rural areas, these figures are misleading as most women are employed as unpaid family workers in family farms and family businesses, engaging in activities like taking care of livestock etc.

According to the PLFS, North-East Indian states rank among the highest in percentages of females holding managerial positions, with Meghalaya topping the list, followed by Sikkim and Mizoram. These states are followed by Andhra Pradesh and Punjab. In terms of literacy rate and professions involving technical roles, females from Northeast India show the highest percentages across India.

The states which have fared the worst in terms of female workers in the managerial position are Assam, followed Haryana, Andaman and Nicobar Islands, and Uttarakhand.

Sikkim tops the list of states with the highest ratio of females to males among professional and technical workers with 120.2 percent, followed by Meghalaya (101.5 percent) and Kerala (91.6 percent).

Female entrepreneurship in India

Given the numerous kinds of barriers that women face in obtaining and retaining suitable jobs, entrepreneurship provides an alternate avenue to productive participation in the workforce. However, India is not performing well on the index of female entrepreneurship either, with only 21.49 percent of total establishments and 13.41 percent of non-agricultural establishments in India being owned by women. There are several structural barriers that exist, including limited avenues for women to enter only select business domains. But the most noteworthy barrier is posed by accessibility to finance for setting up businesses, with around 70 percent of women surveyed across four cities citing access to credit as a barrier.

Gender wage disparity in India

Statistics suggest a significant pay disparity exists between males and females who are engaged in similar kinds of jobs. The tables below provide a comparative perspective of wages earned by female workers and their male counterparts.

The cost of gender discrimination at the workplace

India’s growth story will continue to remain unsustainable unless it is inclusive and converts the potential of gender minorities into actual jobs. The data sets hinting at declining female labor force participation and hiring biases are concerning not only from the point of view of women’s liberation and autonomy but also from an economic perspective.

Inequality and discrimination have adverse impacts on economic growth. A positive correlation between discrimination and economic growth exists and operates through the following linkages:

• Selection distortion effect of employment discrimination: Increased discrimination in the labor market would lead to a decline in the employment chances of the gender minorities, thus not incentivizing them to attain better education, which would in turn lead to a decline in average productivity/ability of workforce, thereby depressing overall economic growth.
• Measurement effect of employment inequality: A number of case studies conducted have shown that women are found to underreport their work, especially household domestic workers and petty agricultural workers. This might be a result of the prejudiced notion of Sanskritization, where imposing restrictions on women is sought to achieve upward caste mobility; many high caste women are not allowed to work outside. Thus, much of female labor goes unrecorded in the system of national accounts. Greater access to education will lead to substitution of unrecorded female labor with recorded female labor by not only changing their mindset but also but also by increasing their productivity, making female labor more visible and thus responsible for increased economic output.
• Discrimination against equally productive individuals in managerial positions: This would lead to a decline in equilibrium wages, which would further decrease the cut-off level of talent leading to a decline in average level of entrepreneurship and thus a decreased innovation level. It also implies a decline in female education due to structural disincentives; because of reduced wage earnings, women may choose to reduce their investment on education or upskilling.

Indian laws and policies governing women’s rights and protections in the workplace

Key employment and unemployment indicators

• Labor Force Participation Rates (LFPR): LFPR is defined as the percentage of persons in the labor force (that is, working or seeking or available for work) in the population.
• Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
• Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labor force.
• Activity Status – ‘Usual Status’ (US): Activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period. When the activity status is determined on the basis of the reference period of the last 365 days preceding the date of survey, it is known as the usual activity status of the person. The longer-term usual status tends to include chronic unemployment and seasonal work patterns.
• Activity Status – ‘Current Weekly Status’ (CWS): The activity status determined on the basis of a reference period of last seven days preceding the date of survey is known as the current weekly status (CWS) of the person. The weekly approach is closer to the global norm, and captures unemployment over a shorter term.

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