Urban Infrastructure and Labour Force Participation in India

In this paper, the impact of urban infrastructure investment on female labour force participation is studied for different income groups, namely the poor, the lower class, and the middle class. In particular, the effect of government spending on water supply/sanitation, buses, and basic household services under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) on female labour force participation is assessed. A probit regression model over a pooled cross-sectional dataset at the district level is deployed for the analysis. Female labour force participation is the categorical dependent variable, while government spending on the infrastructure scheme is the main explanatory variable. The results indicate that investment on water supply and sanitation facilities in a district has a positive effect on female labour force participation among middle-class women, but not on lower-class women. The expenditure on dwellings, and basic services, discourages female labour force participation among poor women. The paper throws light on the role of class in determining the effect of urban infrastructure programmes on female labour force participation. It shows that the poor women are not driven into labour force due to lesser burden of household chores in the presence of better water supply, and sanitation facilities, and the urban housing programmes alienate poor women from job opportunities, while encouraging middle-class women to participate in the labour force due to the creation of a slum-free and supposedly safe environment.