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November 17, 2021COVID-19 & Women Labour Force Participation Paradox in India
Introduction
The ongoing Covid-19 pandemic is an unparalleled tragedy in human history which has already killed more than 3.7 million people and brought economies world over to near recession.
Covid-19 saw India’s GDP per capita taking a nosedive as unemployment rates peaked at historical levels. India, like many countries of the world, may take years to recover from this loss.
The pandemic seems to have hit women’s employment harder irrespective of nationality or occupation. Studies indicate that Covid-19 caused women to drop out of the labour market at a faster rate than their male counterparts (Abraham et al 2021).
Indian labour market mapping however, presents a curious contradiction which motivates us to empirically examine the effect of Covid-19 on the Female labourforce participation rate(FLPR) in India.
Research Methodology
The article aims to examine the relation between women in the labour market and economic development via a Trend Series Analysis from 2000 to 2021. FLPR and GDP per capita (current prices) have been used as a proxy to measure female participation and economic development respectively. For 2021, the FLPR data is based on a sample study on Statista sample study till February 2021 and GDPPC till May 2021.
Distress Driven FLPR
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 mostly been distress driven. Whenever the Indian GDP has witnessed a fall and corresponding incomes declined, women stepped into the workforce many times as disguised workers to keep the household incomes intact. As the economy improves, the same female workers seem to exit the labour market going back to their household duties. (Abraham , 2009)
Regarding women’s participation in the labour market, an interesting dimension is the U-shaped relation between economic development and women’s FLPR. The hypothesis posits that female participation rates are highest in poor countries, where women are engaged in subsistence activities, and fall in middle-income countries because of the transition of (mainly) men to industrial jobs. As education levels improve and fertility rates fall, women are able to join the labour force in response to growing demand in the services sector. (Verick 2018)
India though, which has been described as a lower-middle-income country, exhibits some unique FLPR trends. When India was hit by a drought in 2001 and 2002, the female labour participation rate steadily increased from 31.97% in 2000 to 33.46% in 2005. Come 2005, FLPR registered a steep fall year-on-year until the trend was arrested in 2013. Post 2013 to 2019, women continued to drop out of the labour market but at a more tapered rate.
Interestingly, 2004 to 2010 has been described as the golden period of the Indian economy when growth rates averaged to 10% pa. The slower fall in FLPR from 2013 to 2019 coincided with growth rates slowing down (when compared with India’s golden decade).
This trend saw a sudden reversal as Covid-19 and the subsequent lockdown hit in 2020. While the GDP Per Capita fell from 2019 to 2021, FLPR rose from 22.3% in 2019 to 24.8% in 2020 to a 36% in 2021 mimicking the pattern observed by Vinoj Abraham in early 2000s.
Theories and experience tell us that women’s participation in the labour force is driven by variables like poverty, higher educational attainment, and availability of relevant opportunities and as a response to economic shocks. In this case, as an economic downturn hit and incomes fell, women were forced to take casual/marginal work or engage in subsistence activities to ease the economic crisis.
Simply put, the FLPR trends during Covid-19 are nothing but a response to the economic shock brought by the pandemic.
Education and FLPR – The Indian Paradox
Greater FLPR is a desirable proposition towards robust economic growth. Normatively, women education is a tool to expand FLPR. While women’s education in absolute numbers has increased in India, India’s labour market empirically presents a contrary picture of FLPR.
As seen in Fig.1, India’s FLPR rise in 2020 should have heralded an increased GDP Per Capita in 2021.Or the falling FLPR from 2005-2010 should have ushered in the “Black Age of Indian Economy” rather than the “Golden Age”. Paradoxically the opposite happened in India.
Way Ahead!
The pandemic calls for critical reflection. India has to look beyond mere women’s participation in the labour force as a crisis management tool. Firstly, India suffers from several fronts of labour market challenges. India’s labour market size is small, roughly about 41% of her population (compared to nearly 50% of developed countries’, above 68% of Singapore’s and nearly 60% of China’s population are in the earning labour force). Undoubtedly small labour markets absorb fewer women.
Secondly, while India’s women education in absolute numbers has increased, their ratio to population needs substantial intervention. India has also taken strides towards primary and secondary education of women but now our policy focus should be on their higher education coupled with training programmes, access to childcare, safety and better access to appropriate highly productive job opportunities.
References
Abraham, Vinoj. 2009. “Employment growth in rural India: distress-driven?.” Economic and Political Weekly 97-104.
Rosa Abraham, Amit Basole, SurbhiKesar. 2021. “Down and Out? The Gendered Impact of the Covid-19 Pandemic on India’s Labour.” 4.
Verick, Sher. 2018. “Female labor force participation and development.” IZA World of Labor .
(This article was written by Anushka Dwivedi and Rakshikha P)
Views expressed by the author are personal and need not reflect or represent the views of Centre for Public Policy Research.
