Women employment

Indian economy poses structural constraints

The quarterly bulletin of the Periodic Labour Force Survey (PLFS) for January to March 2024 (Q4FY24), released recently, had interesting findings regarding women and their state in India’s labour market. In terms of involvement in the workforce, the female labour force participation rate (LFPR) in urban areas increased from 22.7 per cent in Q42022-23 to 25.6 per cent in Q42023-24. Since 2022, a steady uptick in the female LFPR is visible. It is now at an all-time high since the PLFS was launched in 2017-18. Besides, the female unemployment rate in urban areas has been declining since 2022. It decreased from 9.2 per cent in Q4FY23 to 8.5 per cent in Q4FY24. However, female representation continues to remain low in the labour force. The female LFPR hovers around one-third of the male LFPR, which stood at 74.4 per cent in Q4FY24. While equal participation does not automatically guarantee gender equality, India is still far from achieving equal labour market outcomes for both genders.

Further, between Q42022-23 and Q42023-24, the share of women employed in regular salaried jobs in urban India declined from 54.2 per cent to 52.3 per cent. In fact, this is the lowest in any quarter over the past six years. During the same period, the share of women engaged in self-employment went up from 38.5 per cent in Q42022-23 to 41.3 per cent in Q42023-24. This includes working as an unpaid helper in household enterprises. Both developments point to a deterioration in the quality of work being generated. It has been observed that a rise in education levels among women in urban areas leads to their staying at home to take care of household responsibilities. Female labour force participation often tends to drop among women in their early to mid-twenties, suggesting that marriage- and family-related responsibilities specifically limit women’s labour force participation. For those who do find productive employment, it is more difficult to get adequate remuneration compared to their male counterparts.

The increase in self-employment and unpaid work in family enterprises, which was also witnessed in the annual PLFS report, highlights the lack of remunerative employment opportunities in the country. In the case of urban employment, the trend among firms to bring their employees back to office after the pandemic has also resulted in high attrition rates among women — many are unable to return to work owing to the restructuring of household responsibilities during the pandemic. Despite a significant increase in the LFPR and workforce participation rates among women, inadequate job creation in urban areas meant that a significant proportion of women remained unabsorbed in productive work opportunities despite migrating to cities in search of improved livelihood. The gender gap in India’s labour market does not always arise out of differences in educational attainment and occupational skills. More often than not, labour markets penalise the work-time flexibility that women demand. Things would perhaps change with a significant increase in job creation, which will push up demand for both skilled and unskilled labour. While the government has taken several steps to support women in the labour force, the nature of the Indian economy with a large number of small enterprises also poses structural constraints that may be difficult to address in the short run.