Why Is Women LFPR Falling?

India experienced an enormous GDP growth of 8.7% (World Bank,2021) and is said to be one of the fastest growing economies in the world. One would expect that such stable and high GDP would create the rising jobs and this would somehow improve the Labor Force Participation Rates(LFPR) . But the official periodic labor survey on employment and unemployment by the National Sample Survey Organisation (NSSO) for 2011-12 estimated LFPR to be roughly 25 percent for women between 16-60 years, down from 30 percent in 1999- 2000. This becomes a puzzling situation, specially when we see that the fertility rates have also declined over the years, and hence LFPR for women should have improved.

When searching for the reasons for this declining LFPR for women, we came across the following few possibilities.

The first hypothesis is based on the reason that long run changes in female labor supply follows a U-shaped relationship between national income and female labor force participation rates.

This is because in the initial stages of development, with an increase in the national income of a country, households become wealthier and women tend to move out of jobs, specially low-income subsistence jobs, and become economically inactive. It is only after a few years in development that the country starts offering jobs which are acceptable to women, and hence the LFPR of women rises.

The increasing women attendance in educational institutions is also one of the reasons for the decline in LFPR. Besides that, changes in measurement methodologies over the years is also a reason.

Currently India has 25% of its female workforce, which is lowest among the emerging economies. We all agree that employing more women would boost India's growth rate and hence we should work towards the same.

The recent women reservation bill passed by Lok Sabha for 33% reservation for women in Lok Sabha and Assemblies of State and National Capital is a step taken towards the same. Although debates exist over the feasibility of the policy, we as citizens should spread awareness and help women get out and get the world working!

-Sampada

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