The job market paradox

The sharp drop in India’s female labour participation rate is bad enough; what makes it worse is that the decline is faster in rural areas. The other worrying factor is most of those who work are doing so in subsidiary or more marginal employment. This has a twin effect: The pay is often poor in relation to the working hours, which in turn reduces the incentive to carry on with the job.

The findings shouldn’t come as a surprise. An estimate made by the US Population Division says India's women labour participation rate is only higher than Fiji's in a list of 14 Asia-Pacific nations. To put things in perspective, countries like Bangladesh are far ahead of India, mainly because of the progress made by the organised garment industry. The lot of women workers in Bangladesh has, in fact, been improving dramatically. The female share of the labour force in the export processing zones (almost 72 per cent) in Bangladesh exceeds that of Malaysia and is almost as high as Korea and the Philippines.

There are several social factors at work for the low participation of India’s women in the workforce. Societal expectation of women’s role as caregivers and caretakers of the household often mean that women who seek work encounter opposition from their peers and families. There are other factors, too. In a survey conducted by Sakshi, a non-government organisation that works in the area of gender justice, 80 per cent of respondents said sexual harassment existed at their workplace and 53 per cent said men and women did not have equal opportunities at work.
 

One of the major shortcomings of India's talent pool is the conspicuously low participation of highly-educated women in economic activities. It's fairly obvious that more education has not translated into more working women in India. The research has indeed shown that there is a negative relation between women’s workforce participation and education levels — as the education level increases, workforce participation decreases. So illiterate women are more likely to be employed than educated women. That’s because the nature of economic growth in the country has meant that jobs have not been created in large numbers in sectors that can readily absorb women. For example, while women represent around 38 per cent of enrolment in higher education, their workforce participation rates remain much lower even in urban India. This low engagement arises from the low quality of many jobs offered to women and India's societal structure. For example, the Sakshi survey shows that nearly two-thirds of women in manufacturing are employed as production operators or manual workers. Even in the service sector, women are concentrated in clerical, sales and services jobs that are traditionally regarded as female occupations.

An International Labour Organization study brings in an interesting angle. Despite inadequate job creation, household incomes did rise, but this potentially reduced women’s participation, especially in subsidiary activities due to change in preferences. The main reason cited for this is the other income effect: The greater the income women’s households had apart from their own earnings, the lower the chances of the women being in the labour force.

Though the situation is better in urban areas, India, in fact, sees the highest drop in representation of women from junior to middle-level positions, unlike several other Asian countries where such a drop occurs from middle- to senior-level positions. This, in turn, impacts the supply line for higher levels. Data shows almost one-third of women employees have not resumed work in the absence of a support system at home to take care of the child. This, in turn, disproves the hypotheses that organisations have any control over women’s decision to exit/re-enter the workforce. Flexible work policies or extended leave can, at best, be a minor enabler for those who possess career aspirations in a situation where close to 78 per cent of eligible female graduates choose not to participate in the organised workforce.

The irony is that Chinese women are much more likely to be in the workforce despite that country's lower percentage of skilled women in the total population. This is because workforce participation rates are twice as high for Chinese women as they are for Indian women.

Indian companies have no way out but to facilitate this change. This would mean looking away from the nine-to-five system of work hours; or setting up a day-care facility for employees' children; or other family-friendly benefits such as flexible work schedules, telecommuting, family leave and job sharing. Most importantly, this would require a change in mind set — no job can be gender-specific.