Can Employment Empower Women in Rural India

The literature on women empowerment highlights a positive correlation between work and decision‐making power of women within families. On the contrary, the role of work opportunities in letting women achieve greater control over their lives, making them more independent is also well‐established. In this background, we explore the effect of women employment on different dimensions of women empowerment by using a nationally representative household survey data, the Indian Human Development Survey (IHDS‐II, 2011–12). As “empowerment” is unobservable, multi‐faceted and difficult to quantify, we model it by an index which aggregates the qualitative answers provided by a respondent. Due to the presence of an endogenous relation, we exploit sources of exogenous variations in employment through an instrumental variable (IV) setup. Following the literature, we identify IV as the level of transport infrastructure in the region where a woman resides. We find that the estimated coefficients are positive and statistically significant, remaining robust to changes in empowerment calculation. In the context of public initiatives aimed at improving female labour force participation and empowering women in India, our results show how policymakers can look beyond standard policies and take the help of transport‐related initiatives to improve employment and empowerment.