Datanomics: More women seek jobs, but stiff labour market a challenge

Despite a sharp rise in women's labour force participation, India has seen little improvement in female employment rates or women's share in labour income

The labour force participation rate (LFPR) for women in India has increased in recent years — this is frequently cited as a positive signal for woman empowerment in the country. However, latest data from the World Inequality Lab shows that these gains have not translated into a significant rise in employment rate for women or higher relative earnings vis-à-vis men.

 

Indian women’s share in labour income stagnant

 

The share of labour income earned by women in India has remained unchanged at around 15.7 per cent between 2017 and 2023. It is also significantly lower than countries like Bangladesh, South Africa and Brazil. Women in Pakistan, however, had a lower share in labour income, according to data from the World Inequality Lab. 

Source: World Inequality Lab

 

 

Only marginal rise in women’s employment rate

 

Women’s employment rate has increased only marginally in India between 2017 and 2023, in line with the trend witnessed in women’s share in labour income. 

Note: Employment rate is calculated on the basis of women aged 15-64 employed in any form of economic work irrespective of status (salaried work, self-employed, unpaid work) and sector | Source: World Inequality Lab

 

 

Supply-demand mismatch

 

The sharp rise in women’s LFPR has expanded supply faster than demand in the labour market, which partially explains the stagnation in women’s labour income share and little change in employment rate.