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Rising incomes, stability linked to declining female workforce participation



Rising income levels and stability in families are disincentivising women from joining the labour force, according to a recent report by the World Bank, which analysed government data from 2004-05 to 2011-12. As many as 19.6 million women — equivalent to the population of Romania — dropped out of the workforce during this period, of which rural women accounted for 53 per cent, the report said.

In its three-year (2017-20) "action agenda draft" released on April 23, the NITI Aayog stressed on the importance of promoting equal participation of women in the economy.

Only 27 per cent women are in the labour force — the lowest among BRICS countries; among G-20 countries, it is better only than Saudi Arabia.

The labour force does not include women who do "unpaid care work", which refers to all unpaid services within a household including care of people, housework and voluntary community work.

The World Bank study, titled "Reassessing Patterns of Female Labor Force Participation in India", found that the decision to join the labour force is primarily influenced by economic stability at home rather than social norms, educational attainment and age. The study assessed the proportion of self-employed, regular wage earners and casual labour in a given household's working-age population.

It found that, in rural as well as urban areas, while the proportion of regular wage-earners in households increased between 2004-05 to 2011-12, proportion of self-employed persons and casual labour decreased, indicating the rising stability in family incomes. The proportion of regular wage earners in urban areas was 20 percentage points more than rural areas, which explains its low FLFP (female labour force participation) rates.

Therefore, as household incomes become more stable, fewer women join the labour force, concentrating instead on "status production" at home.

Status production is work that maintains and enhances the family's social standing, although they do not necessarily enhance the woman's status within that unit. Common examples of status production work include the upkeep of suitable work clothes, provision of food at the workplace, entertainment of colleagues and feeding hired hands and co-workers within the woman's family.

Secondary and higher secondary education did not lead to women participating in the labour market in India, the World Bank analysis found. The lowest incidence of FLFP rate is among those who had attained secondary (Grade X) and post-secondary levels of education, followed by those with levels of education below the secondary level in both rural and urban areas.

The FLFP rate is highest among illiterates and college graduates in both rural and urban areas. These two groups, illiterates and those with college education, are also the groups that experienced the largest drops in FLFP rates during this period.

Only 691 females attend college for every 1,000 males. This ratio drops from 825:1,000 at the age of 19 years to 531:1,000 at 25-29 years. As many as 1,403 females have never attended any educational institution for every 1,000 males who have not.

Between 2004-05 and 2011-12, FLFP has dropped across all educational categories in both rural and urban areas. This indicates that irrespective of one's education, the incentive for females to participate in the labour force has declined over the period.

"The decline in the FLFP rate for all educational categories and the particularly poor performance of those with secondary and higher secondary (Grade XII) levels of education need to be explored in detail," the study said. This can probably be explained by a lack of appropriate jobs in rural areas, or the expectation of higher wages among those having secondary levels of education.

The Aayog's 2017-20 agenda says women tend to be paid less, work in less productive jobs and are over-represented in unpaid care work, and engaging in vulnerable forms of employment is a reflection of their subordinate position in the household.

Marriage affects the participation of women in two ways, the World Bank study said. After marriage, women typically take on the role of caregiver in the family, which significantly alters the allocation of their time.

Marriage changes a woman's social position and status; a married woman joins the labour force only when social norms and the stigma attached to paid labour conform with family restrictions.

In rural areas, the FLFP rate of married women was more than unmarried women. However, in urban areas, participation rates of unmarried women were higher than that of married women.

In urban areas, participation rates of women dropped between 2004-05 and 2011-12, leading to an overall drop in the FLFP rate for both married and unmarried women.

So, while marital status did have an impact on the participation rates of women in the labour market, it does not explain the drop that occurred during 1993-94 to 2011-12 in the urban areas.

The study found that irrespective of their caste, the FLFP rate of married females is higher than unmarried females in rural areas.

Merely increasing women's access to education and skills will not necessarily lead to a rise in FLFP, the World Bank study suggested. Gains will not be realised unless social norms around women's (and men's) work also change, and/or the rural labour markets offer forms of employment that are acceptable and attractive for women and their families.

Policies should centre on promoting the acceptability of female employment and investing in economic sectors in rural areas that are attractive in terms of female employment, the report said.