Women's Day Special: India's Female Labor Force Participation Sees Encouraging Surge; What Is Driving It?

India's female Labor Force Participation Rate (LFPR) is on the rise, showcasing a positive trajectory after years of stagnation. Despite being the fifth-largest economy globally, India has grappled with gender disparity, reflected in its ranking of 127 out of 146 countries in the 2023 World Economic Forum's Gender Gap Index. However, recent data presents a glimmer of hope for gender inclusivity in the workforce.

According to the latest Periodic Labour Force Survey (PLFS) released by the statistics ministry on February 12, 2024, India's male urban LFPR stood at 74.1% in the last quarter of 2023, while the female urban LFPR was 25%, revealing a substantial gender gap. Yet, the noteworthy development lies in the upward trend of female LFPR, indicating progress.

The journey to this point has been a roller coaster for women in the workforce. In the throes of the COVID-19 pandemic in April-June 2020, the female LFPR dipped to 19.6%, casting a temporary shadow on the aspirations of working women. However, resilience has been the hallmark of the subsequent years, with a steady climb from 20.2% in late 2021 to 25% in the closing months of 2023.

Equally encouraging is the decline in the female unemployment rate, dropping from 10.5% in October-December 2021 to 8.6% in the corresponding period of 2023. This positive trend suggests that more women are finding employment opportunities, contributing to the overall economic landscape.

Delving into rural India, the statistics paint an even brighter picture. The female LFPR in rural areas surged from 21.7% in 2017-18 to an impressive 34.6% in 2022-23. Concurrently, the rural female unemployment rate saw a substantial decline from 7.5% to 4% over the same period, signifying enhanced employment prospects for rural women.

However, the quality of jobs taken up by women remains a subject of concern. While the proportion of women in self-employed roles, including unpaid household helpers, increased from 35.3% in early 2022 to 40.3% in late 2023, the percentage of women in salaried jobs dropped from 56.7% in January-March 2022 to 53%. This shift raises questions about the nature of employment opportunities available to women.

Ashwini Deshpande, a professor of economics at Ashoka University, expressed scepticism about the perceived improvement in job conditions. Deshpande noted, "The increase in self-employment in agriculture could reflect disguised unemployment or underemployment, which refers to a situation where too many workers are doing too few jobs."

However, divergent opinions exist on this matter. Some experts, including Bishwanath Goldar and Suresh Chand Aggarwal, attribute the change in employment dynamics to various factors such as the easing of labour regulations, progress in financial inclusion, improved ease of doing business, and the burgeoning digital economy. Goldar and Aggarwal propose that the shift of rural male workers from agriculture to non-agricultural activities has indirectly created job opportunities for women in rural areas.

In their recent paper, the duo stated, "It is ultimately the growth in the manufacturing and services sectors and the creation of employment opportunities in these sectors that made male workers in agriculture shift to non-agricultural activities, thus creating job opportunities for female workers in rural areas."

While India celebrates the positive strides in female LFPR, there is a pressing need for a comprehensive analysis of the job landscape to ensure that these opportunities translate into meaningful and empowering employment for women across the nation. As the workforce dynamics evolve, India finds itself at a crucial juncture, grappling with challenges while poised for transformative change in its gender employment landscape.

*Inputs from Moneycontrol*