On 24th March 2020, the Indian government announced its first lockdown to control COVID-19. What followed was a mass exodus of migrant workers from cities as industries & allied sectors closed down. India’s GDP per capita saw a fall & unemployment rates peaked at historical levels.

Women have since been reported to be more stressed, overworked with household chores & office, forcing them to drop out of the labor market at a higher rate than men. On mapping the participation of women in the Indian labor force with India’s per capita GDP, some interesting trends came forward.

(We use a measure called the Female Labor Participation Rate (FLPR) to measure female participation.)

Distress Driven Female Participation 

Vinoj Abraham, in his seminal 2009 paper “Employment in India: Distress Driven?” pointed out how the increase in employment specifically for rural Indian women has been chiefly distress driven. Whenever the Indian GDP has witnessed a fall & incomes have reduced, women have stepped into the workforce many times as disguised workers to keep the household incomes intact (Abraham, 2009).

Regarding women’s participation in the labor market, an interesting dimension often discussed is the U-shaped relation between economic development and women’s labour force participation. The hypothesis proposes that the FLPR will be highest in the poorer countries. As countries move up the development curve, there is a drastic fall in the FLPR, after which it bottoms out before starting to rise again (Verick, 2018). While some countries experience this path, FLPR trends in India have been different. 

From 2005 to 2019, India’s FLPR fell as GDP Per Capita rose. The fall in FLPR was steep from 2005 to 2012 (2004 to 2010 has been described as the golden period of the Indian economy with growth rates averaging to 10% pa) & more tapered out from 2013 to 2019 as the growth rates slowed down year after year.

This trend saw a sudden reversal as Covid-19 & the subsequent lockdown hit in 2020. While the GDP Per Capita fell steeply from 2019 to 2021, FLPR rose from 22.3% in 2019 to 24.8% in 2020 to 36% in 2021, mimicking the pattern observed by Vinoj Abraham back in early 2000s (a drought hit India in both 2001 & 2002).


Chart
 Source: ILO Stat (https://ilostat.ilo.org/topics/population-and-labour-force/)   IMF (https://www.imf.org/external/datamapper/NGDPDPC@WEO/)                            * 2021 : FLPR data till Feb 2021 (Statista Research Dept), GDPPC till May 2021

Generally, women’s participation in the labor force is driven by variables like poverty, higher educational attainment, availability of relevant opportunities and as a response to economic shocks. In this case, a possible reason could be a response to the unexpected fall in the household income because of the pandemic. As the economic downturns hit & incomes fell, women were forced to take casual/marginal work or engage in subsistence activities to ease the economic crisis. 

Growth & FLPR- the Indian paradox

Studies time & again say that gender parity in the workforce often leads to an acceleration in economic growth & countries that keep their women in homes are losing out on development. A simple glance at India’s numbers certainly disproves this statement.

Theoretically, the rise seen in India’s FLPR in 2020 should have increased GDP Per Capita in 2021. Or the falling FLPR from 2005 to 2010 should have ushered in the “Black Age of Indian Economy” rather than the “Golden Age”. 

While many people point to the positive relation between FLPR & GDP, they fail to look at how education amongst women & FLPR are also correlated. Distress driven female participation often scores low on higher education. When education levels are low to moderate, women to supplement their household income have to take up marginal jobs, which are often low on both productivity & value addition to the GDP (Chatterjee et al, 2018). This can be one of the many reasons why increased female participation does not lead to an increasing GDP Per Capita in India.

Covid 19 calls for India to focus on these issues. We must look beyond mere women’s participation in the labor force as a crisis management tool. While India has taken strides towards primary & secondary education of women, our policy focus should now be on women’s higher education, training programs, access to childcare, enhancing women’s safety & better access to higher productivity jobs. The shift in focus is imperative for the women labor force to take advantage of new opportunities that arise as a country grows and, in so doing, can contribute to the development process itself.

References  

1. Abraham, Vinoj. “Employment growth in rural India: distress-driven?.” Economic and Political Weekly (2009): 97-104. 

2. Chatterjee, Esha, Sonalde Desai, and Reeve Vanneman. “INDIAN PARADOX: RISING EDUCATION, DECLINING WOMENS’ EMPLOYMENT.” Demographic Research 38 (2018): 855. 

3. Verick, Sher. “Female labor force participation and development.” IZA World of Labor (2018). 

4. https://data.worldbank.org/indicator/SL.TLF.ACTI.MA.ZS?locations=IN 5. https://www.newindianexpress.com/business/2021/may/20/bangladesh-beats-india-in-per -capita-income-2304942.html 

6. https://www.statista.com/statistics/1043300/india-work-participation-by-gender/ 7. https://www.business-standard.com/article/pti-stories/female-labour-force-participation-i n-India-declined-from-34-pc-in-2006-to-24-8-pc-in-2020-study-120030601403_1.html

(This blog was written by Anushka Dwivedi and Rakshikha P under guidance of Dr. R P Pradhan, CPPR Distinguished Fellow)

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