The missing workers of urban India
Between 2004-05 and 2011-12, India’s female labour force participation rate declined by nearly 7 percentage points to 22.5%. Mint examines the causes and economic impact
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Mumbai: When Sheetal Jhaveri left college in 2002 after finishing her masters in business administration (MBA), she seemed destined for a long corporate career. She had a promising start, working first as a management trainee at one of the largest Indian banks, and later as a magazine journalist. But marriage in 2004 changed her priorities in life, and she quit work.
“I always had a work dream while growing up but when you move out of your sheltered existence at home, it becomes more difficult to manage work and life priorities,” said Jhaveri, 33.
Realizing that she may no longer be able to pursue a full-time job, she opted to become a certified financial planner so she could work freelance on a part-time basis.
“My family is extremely supportive and I have all the help I require to run my home,” said Jhaveri. “Yet, being the daughter-in-law, my presence is expected during social functions. So, working full time may not always be feasible for me.”
Like Jhaveri, a majority of Indian women give up their careers to manage their homes after marriage, limiting female participation in the country’s economic life. Other fast-growing economies in Asia such as China and South Korea have rapidly reduced the gender gap in work participation rates as they expanded, but India has been an exception to that trend so far.
In the period when the Indian economy grew at its fastest, the proportion of working women declined the most. Between 2004-05 and 2011-12, India’s female labour force participation rate (LFPR) declined by nearly 7 percentage points to 22.5%, according to the National Sample Survey Office (NSSO), even as the economy expanded at an annual pace of 8.5%.
Globally, women account for half the working-age population but represent only one-third of the labour force. Women who do have a job typically earn less, and are much less likely to rise to leadership positions than men, according to a June 2013 special issue of Finance and Development, a journal published by the International Monetary Fund (IMF).
Although gender inequality at work is a global problem, it is far more acute in India. India’s female LFPR has historically been low, but the decline in recent years has placed India 10th from bottom in a list of nations ranked according to their female LFPR, World Bank data shows.
According to scholars, the under-representation of Indian women in the workplace reflects their low social status, and reinforces gender stereotypes. The spate of high-profile rape cases over the past year may have woken up the country to the most brutal impact of a male-dominated society, but its impact has been felt for long, in a more subtle fashion, on the nation’s economic life.
Urban India, the driver of economic growth, has lower rates of female LFPR than even rural India. The rapid gains in the educational attainments of women in urban India over the past few decades have not translated into economic empowerment.
Even as the number of women graduates has increased manifold, the proportion of women graduates who work has fallen sharply over time. The proportion of working women graduates in urban India tumbled 135 percentage points between 1983 and 2012 to 26%, research by Vinoj Abraham, an assistant professor at the Thiruvananthapuram-based Centre for Development Studies (CDS), shows.
A key reason why educated women tend to stay away or drop out from work is that they tend to be married to well-educated and high-earning men, research by economists Surjit Bhalla and Ravinder Kaur shows. The rise in female education levels seems to have been countenanced by an even greater rise in the educational attainments and incomes of men in India.
Jhaveri, who is married to a Mumbai-based businessman, said her family does not depend on her earnings, which has allowed her the flexibility to “slow down” on work.
Jhaveri started consulting for a few clients but the birth of two daughters in the past few years has meant that she ends up spending most of her time with her children. Jhaveri said she was glad to be able to focus on her two young children rather than worry about augmenting the family income.
For others, the decision to quit work may be more complicated and involve significant costs. Gulshan Patel, 48, left her job as a lecturer at a state-funded college after her first child was born. She joined a privately owned college five years back, but the pay is much less than what it should have been had she stayed on in the first job. The responsibility of raising a child meant that she could not take up the responsibility of going to work, Patel said.
Marriage and maternity-induced career breaks are common in all parts of the world, said Shachi Irde, executive director of the Indian arm of the global non-profit group Catalyst Inc., which promotes gender diversity at work.
But what makes India special is the early age of marriage, because of which the largest exit of Indian women from the workforce happens between the junior and mid-career levels, as opposed to between the mid and senior levels in other parts of the world.
Experts say a lack of role models to look up to and the absence of a strong peer network act as powerful deterrents to a long and healthy work life for women. Added to that are extraordinary expectations of an Indian woman at home.
The absence of safety and supporting infrastructure in urban India only compounds the problems. Unlike its East Asian counterparts, India has not invested much in building effective public transport systems and this makes commuting to work a big hassle, affecting women, said Bino Paul, who heads the Centre for Human Resource Management and Labour Relations at the Tata Institute of Social Sciences, Mumbai.
The lack of enough working women acts as a burden on the economy. Research by organizations such as Catalyst and consultancies such as McKinsey and Co. show that greater gender diversity leads to higher profitability and better corporate governance.
The economic losses can be particularly high for a country like India. According to a 2012 report by Booz and Co., a global consultancy, India loses a quarter of its gross domestic product (GDP) because of low female LFPR.
This absence of women from work is also a missed opportunity. With a number of qualified Indian women out of work and India facing an estimated shortage of 5 million skilled workers, there is a vast opportunity to absorb more women in the workplace, said Irde of Catalyst.
There are signs that some companies are waking up to the untapped opportunity. Leading the pack are companies in the technology sector.
It takes the lead
According to the industry lobby group Nasscom, the proportion of women employees in the sector rose 10 percentage points between fiscal 2004 and fiscal 2012 to 30%.
Executives in the sector attribute the improved gender balance to a rapid increase in the number of women engineering graduates, and the special effort companies are making to retain them.
Companies have begun facing tough questions on gender balance from clients abroad, and this has contributed to the change, according to Ritu Anand, vice-president of human resources at Tata Consultancy Services (TCS), India’s largest software services exporter.
While some allow greater flexibility in leave and work schedules, others arrange day care centres for employees with young children at, or close to offices. Still others such as TCS have started inclusion programmes that focus on the needs of women.
The company initiated a reorientation programme for women employees who join the firm after a long break. It also took steps to ensure that an employee’s appraisals did not suffer after a maternity break. Such initiatives have seen the proportion of women employees rise 4.5 percentage points since 2008 to 32.5% at TCS.
There is also greater thrust towards nurturing women leaders now. A new mentoring initiative led by Arun Duggal, chairman of Shriram Capital, and Anjali Bansal, managing director of Spencer Stuart India, is training emerging women professionals for board positions.
The mentorship programme, which started with a batch of 50, arranges one-on-one interactions with senior corporate executives and workshops apart from providing reading material.
“We think better gender balance will lead to better strategy and better governance of companies,” said Duggal. “Having women at the top also provides the additional incentive of improving gender diversity down the ladder, as women workers then have role models to look up to.”
While the new Companies Act and new regulations by the capital market regulator both mandate the presence of at least one woman on every company board, there are concerns that it might lead to mere tokenism. Such fears are legitimate, Duggal says, which is why he is pushing companies to have at least one woman independent director on their boards.
“I think voluntary steps by companies rather than compulsory regulations can be more effective in driving better gender balance,” said Duggal. “So, we try to persuade companies and almost everybody now agrees that we need more women on boards.”
Organizations are waking up to the need for diversity, said Irde, with many more companies initiating programmes to retain women employees. But very few companies have put in place monitoring mechanisms to check how well they are performing on this score.
Women will start working in greater numbers on a full-time basis only when societal expectations of them change, said Chennai-based Saundarya Rajesh, founder of Avtar Career Centres, a human resource consultancy that helps women who have quit working get back to work.
Irde agreed. “The key stumbling block to greater participation of women in the workplace is the firm hold of patriarchy in our society,” said Irde. “The societal expectation from a modern Indian woman has not changed much and she still remains the primary care giver.”