New Delhi: India, which has one of the lowest female labour force participation rates among developing nations, needs to increase the number of women workers to boost economic growth, according to an International Monetary Fund (IMF) working paper.
India’s female labour force participation in 2012 was, at 33%, substantially less than the 50% global average, according to the IMF paper released on Monday.
“Depending on the relevant policies, economic growth could increase by between 1.5-2.4 percentage points per annum," the paper said.
The working paper, citing previous research, stated that the gender gap in the workforce lowered overall per worker income by 26% in India.
The paper also stated that the policies that affect public investment in infrastructure and efficiency of spending on health and education impact female labour force participation rates. The participation of women in the labour force has been declining since 2004-05.
The factors that affect female participation in the labour force range from education level of the spouse as well as rising household incomes.
Gender-based legal restrictions such as right to inherit property as well as “legal impediments to undertaking economic activities (such as opening a bank account) are strongly associated with larger gender gaps in labour force", the working paper said.
Based on data provided by India’s National Sample Survey Office’s five employment and unemployment surveys, the paper states that female labour force participation rates vary widely between urban and rural areas.
“Over time, the gap between the urban and rural areas has narrowed moderately, with most of the convergence being driven by the fall in participation rates in rural areas. As a result…female labour force participation rates nationwide have fallen since the mid-2000s," the paper said
In urban areas, the gap between male and female participation in the workforce can sometimes be as huge as 60%, whereas in rural areas, this gap averages 45%.
Interestingly, as the education gap closes between men and women, India can expect a rise in women’s participation as higher-paying white collar jobs lure women, the paper said.
Currently, however, rising household income sees women’s participation decline.