Home / Politics / Policy /  The gender divide in the Indian labour market

Mumbai: One of the biggest shifts in the Indian labour market has been the dramatic withdrawal of women workers in the past few years. India’s female labour force participation rate, or the proportion of women who opt for work, fell nearly seven percentage points to 22.5% between 2004-05 and 2011-12.

Low female labour participation rates have been a structural problem in India for long but the recent decline means the country has among the lowest proportions of working women. India ranks 10th from the bottom among countries ranked according to their female labour force participation rate, World Bank data show.

The greatest withdrawal of women from the labour force occurred in rural areas, and was largely in agriculture. The withdrawal is all the more surprising as it has occurred during a period of sharp rise in wages that women earn. The gender gap in wages of casual labourers declined nearly six percentage points between 2004-05 and 2011-12 to 31%.

There are possibly three key factors driving women out of the rural labour force. First, there seems to be an income effect that has raised average rural incomes and allowed many women to quit demanding far

The underlying factor that drives women out of the labour force once the family income crosses a certain threshold is the force of patriarchy. It is the key reason why empirical evidence from developing countries including India points to a “U" curve for female labour participation rates, which drops after the family income crosses a minimum income threshold. This rises later at much higher levels of affluence.

Social scientists say that a woman attending only to domestic duties is a marker of higher familial status in large swathes of India. A 2011 research paper by economists Mukesh Eswaran of the University of British Columbia, and Bharat Ramaswami and Wilima Wadhwa of the Indian Statistical Institute, Delhi, showed by using NSSO data that the amount of time a woman spent working outside her home is lower for higher-income groups and higher castes.

A look at the inter-state variations in female labour force participation rates seems to confirm the role of patriarchy as an important driver of gender gaps in labour participation rates. There is wide inter-state variation in the rate.

Bihar, Delhi, Assam, Haryana and Uttar Pradesh have the lowest female labour force participation rates. With the exception of Assam, these states are among those with the lowest sex ratios in the country, suggesting that women might perhaps be less valued in these states.

The rate is lowest across the rural and urban regions of these states, suggesting that the force of patriarchy tends to breach the rural-urban divide. Conversely, states with higher female labour participation rates, such as Sikkim, Meghalaya and Andhra Pradesh, also tend to have higher sex ratios favouring females.

This is the second in a multi-part series,in which Mint examines the structural shifts in labour markets, based on the latest National Sample Survey Office data.

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