Female Labour Force Participation Rate, Reasons, Significance

Context: Despite the PLFS report 2023, showing a remarkable increase of 4.2%, the female labour force participation rate in India remains low at 37%.  This low FLFPR is a big threat to India’s demographic dividend. There is an urgent need to further increase female labour force participation in the productive sectors to help India achieve the dream of becoming a developed nation by 2047. In this comprehensive article, you will come across the following –

• Key data on Female labour force participation in India
• Analysis of the reasons for Low Female labour force participation rate (FLFPR)
• Solutions to increase this FLFPR with examples and case studies
• Relevant Prelims & Mains Practice Question

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Key Facts about Female Labour Force Participation Rate (FLFPR)

Present status: In India, the Female Labour Force Participation Rate (FLFPR) has shown a gradual increase, yet remains substantially lower compared to developed countries.

• 2022-23: 37%
• 2021-22: 32.8%
• 2020-21: 32.5%
• 2019-20: 30%
• 2018-19: 24.5%

Situation in North vs South: Contrary to expectations based on high literacy rates and women empowerment in the southern states has not translated into a higher Female labour Force Participation rate.

• The average FLFPR in five southern states (Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, Kerala) is 13% less than in five northern states (Himachal Pradesh, Rajasthan, Chhattisgarh, Madhya Pradesh, Jharkhand).

International comparison: The World Bank’s data indicates that Indian women’s engagement in the formal economy is one of the lowest globally, ranking above only a few countries in the Arab world in terms of FLFPR.

Reasons for Low Female Labour Force Participation

• Informal Employment: High Informalisation characterized by the absence of formal contracts or social security, prevents women from participating actively in the labour market.
  • About 88% of women employed in industries and 71% in services are informal (International Labour Organization 2018).
• Lack of alternative opportunities: In India, the scarcity of alternative employment options in manufacturing, suppresses their labour force participation.
  • For instance, the automotive industry, employs predominantly male workers, excluding a large proportion of potential female employees.
• Workplace Bias: India experiences one of the most pronounced gender disparities in wages, as highlighted in the Economic Survey of 2018.
  • Discriminatory pay practices and the ‘glass ceiling’ phenomenon create a challenging environment for women, impacting their decision to engage in professional work.
• Occupational Gender Stereotypes: Societal norms dictate specific job roles known as ‘Pink Jobs’ for women, confining them to sectors like nursing, teaching, and gynaecology.
  • This limitation hinders women’s participation in male-dominated fields such as engineering and defence, where they face both overt and subtle barriers.
• Cultural Norms and Domestic Roles: Traditional expectations regarding women’s roles in unpaid care, childcare, and household tasks significantly restrict their participation in the formal workforce.
  • In many patriarchal societies, societal norms discourage or prevent women from pursuing careers post-marriage, further diminishing the FLFPR.
• Household Income and Employment Choice: The rise in household incomes provides women with the financial flexibility to choose not to engage in formal employment, focusing instead on domestic duties or personal interests.
  • National Sample Survey Office (NSSO) suggests that higher family incomes correlate with lower female workforce participation rates.
• Safety and Harassment Concerns: The prevalent issues of violence against women and workplace harassment, particularly in night-time roles, act as significant deterrents, limiting women’s participation in the labor force.
  • The #MeToo movement in India showed the wide range of harassment women face in their respective workplaces.
• Mismatch Between Education and Employment: Despite higher educational attainments among women, there’s a lack of suitable job opportunities.
  • g. despite the increasing female graduates in STEM fields, their representation in related industries needs to improve due to the scarcity of appropriate roles.
• Legal Employment Restrictions: Certain state laws restrict women from working in specific hazardous sectors, impacting their employment options.
  • For instance, laws in some states prohibit women from working in mines or certain factory roles, limiting their employment choices in these sectors.
• Political Underrepresentation: The low representation of women in India’s political landscape, with only 14.4% of seats in the Lok Sabha occupied by women, reflects a gender gap in policy-making.

Significance of Enhancing Female Labour Force Participation

• Economic Growth: The International Monetary Fund (IMF) estimates that gender parity in the workforce could boost India’s GDP by 27%.
• Combating Poverty: Women’s participation in formal work can address the trend of feminization of poverty, characterized by women’s overrepresentation in low-paid, informal work.
• Impact on Health: Increased female employment in formal sectors is correlated with better health outcomes like lower Infant Mortality Rate (IMR) and Maternal Mortality Rate (MMR).
  • A study in Sri Lanka observed a direct correlation between women’s employment and improved healthcare access, leading to a decrease in IMR and MMR.
• Financial Independence: Earning their own income enhances women’s self-confidence and decision-making power in households, especially in areas like family planning.
  • In Kerala, higher women’s employment rates have been linked to their increased role in household decisions (Centre for Development Studies).
• Economic Stability: Dual-income families, resulting from women entering the workforce, enhance household income and economic stability.
  • Dual-income households showed better resilience in economic downturns compared to single-income households (McKinsey Global Institute report).
• Innovation and Creativity: A diverse workforce, including women, brings varied perspectives, leading to increased creativity and innovation in the workplace.
  • Companies with more diverse management teams have 19% higher revenues due to innovation (Boston Consulting Group Study).
• Equity in Pay: Increasing women’s participation in formal sectors can help address the gender wage gap.
  • Countries with higher female labour force participation tend to have a lower gender pay gap (Global Gender Gap Report 2020).
• Women Entrepreneurs: Higher participation in the workforce can encourage women to venture into entrepreneurship, contributing to economic diversity.
  • The success of women-led startups in India, like Nykaa and Zivame, underscores the potential of women entrepreneurs in boosting the economy.
• Changing Social Norms: Employment of women in diverse sectors can challenge and change traditional gender roles, promoting gender equality.
  • The participation of women in sectors traditionally dominated by men in Nordic countries has helped to foster a change in societal norms.
• Impact on Children’s Education: Working women are more likely to invest in their children’s education, leading to better educational outcomes.
  • UNESCO reports that children of employed mothers in developing countries are more likely to be enrolled in school and achieve higher educational levels.
• Improved Family Health: Women tend to spend more of their income on family health, leading to overall improved health outcomes.
  • A research in Bangladesh showed that families with working women were more likely to have better nutritional status and healthcare access.
• Economic Dependency: An increased female workforce can lower the dependency ratio in a population, easing economic pressures.
  • As per a UNFPA report, countries with higher female labor participation often have lower dependency ratios, contributing to economic growth.
• Enhanced International Standing: A higher FLFPR can improve India’s image as an inclusive and progressive economy.
  • The World Economic Forum’s Global Competitiveness Report often cites gender parity as a key factor in a country’s overall economic competitiveness.

Government Initiatives For Female Labour Force

Way Forward

• Policy and Legal Reforms: Revise labour laws like India’s night work restrictions, drawing inspiration from Sweden’s successful labour law amendments for increased women’s participation.
• Flexible Work Arrangements: Promote work flexibility, akin to Best Buy’s ROWE (results-only work environment) program, to help women balance work and family.
• Enhanced Childcare Facilities: Expand affordable childcare, following Sweden’s model, to facilitate women’s employment.
• Vocational Training Programs: Implement targeted training programs, mirroring the European Union’s “New Skills, New Jobs” initiative, to upskill women for emerging job markets.
• Women’s Entrepreneurship Support: Foster women’s entrepreneurship with credit access and mentorship, as exemplified by Bangladesh’s Grameen Bank model.
• Gender-Neutral Recruitment: Adopt unbiased hiring policies like Salesforce to ensure a diverse workforce.
• Equal Pay Initiatives: Enforce equal pay laws, drawing from Iceland’s equal pay certification approach, to bridge the gender wage gap.
• Improved Safety Measures: Enhance public and workplace safety, similar to Delhi’s ‘Pink Ticket’ scheme, to encourage women’s workforce participation.
• Gender Sensitization Campaigns: Run awareness programs to challenge stereotypes, using Norway’s gender equality education as a model.
• Government-Private Sector Collaboration: Develop public-private partnerships, akin to Germany’s ‘Frauen Machen Neue Technologien’, to create job opportunities for women.
• Workforce Re-entry Programs: Introduce re-entry initiatives like Goldman Sachs’ ‘Returnship’ programs to support women returning to work after career breaks.
• Social Security for Informal Workers: Extend social security to informal sector women, inspired by Brazil’s Bolsa Familia program.
• National Awareness Campaigns: Launch campaigns to promote women’s workforce importance, similar to the UN’s ‘HeForShe’ initiative.
• Increased Political Representation: Ensure women’s representation in policymaking, as demonstrated by Rwanda’s gender parity in parliament.
• International Collaborations: Engage in global partnerships for sharing best practices in women’s labour force participation, like the Canada-UK Women’s Empowerment Initiative.

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