IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v98y2017icp360-380.html
   My bibliography  Save this article

Why is the Labour Force Participation of Women Declining in India?

Author

Listed:
  • Mehrotra, Santosh
  • Parida, Jajati K.

Abstract

This paper explores the recent fall in female labour force participation and its socio-economic determinants in India. The major contribution of this paper is: to explore both micro- and macro-level factors which determine female labour force participation rate (LFPR); to examine the “U shape” female LFPR, by examining the likely income and substitution effects of the real wage increase, to identify the sub-sectors within manufacturing and service sectors that could create jobs for new female job aspirants and those older women displaced from agriculture in recent years; and thus to understand the conditions under which female LFPR could be raised. Using both macro-level and household survey (NSS) data, we find that the recent fillip in the process of structural transformation has pushed a large number of females out of agriculture. The growing mechanization in agriculture and rising capital intensity in manufacturing sectors together have limited the opportunity for females because of their low education and skill and due to other cultural constraints. We also found that the rise in real wages in rural areas and the consequent improvement in the standard of living has produced a strong negative income effect which outweighs the positive substitution effect and as a result female LFPR has declined substantially. However, with the massive increase in female enrollment in secondary and higher levels of education, it could be expected that the substitution effect of the increase in real wage would become stronger if appropriate measures are taken by the government, which are suggested.

Suggested Citation

  • Mehrotra, Santosh & Parida, Jajati K., 2017. "Why is the Labour Force Participation of Women Declining in India?," World Development, Elsevier, vol. 98(C), pages 360-380.
  • Handle: RePEc:eee:wdevel:v:98:y:2017:i:c:p:360-380
    DOI: 10.1016/j.worlddev.2017.05.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X17301663
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Goldin, Claudia, 1989. "Life-Cycle Labor-Force Participation of Married Women: Historical Evidence and Implications," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 20-47, January.
    2. Angela Luci, 2009. "Female labour market participation and economic growth," International Journal of Innovation and Sustainable Development, Inderscience Enterprises Ltd, vol. 4(2/3), pages 97-108.
    3. Goldin, Claudia, 1980. "The Work and Wages of Single Women, 1870 to 1920," The Journal of Economic History, Cambridge University Press, vol. 40(01), pages 81-88, March.
    4. Bradley T. Heim, 2007. "The Incredible Shrinking Elasticities: Married Female Labor Supply, 1978–2002," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
    5. Schultz, T.P., 1991. "International Differences in Labor Force Participation in Families and Firms," Papers 634, Yale - Economic Growth Center.
    6. Briones, Roehlano & Felipe, Jesus, 2013. "Agriculture and Structural Transformation in Developing Asia: Review and Outlook," ADB Economics Working Paper Series 363, Asian Development Bank.
    7. Bhalla, Surjit & Kaur, Ravinder, 2011. "Labour force participation of women in India: some facts, some queries," LSE Research Online Documents on Economics 38367, London School of Economics and Political Science, LSE Library.
    8. Nakamura, Masao & Nakamura, Alice & Cullen, Dallas, 1979. "Job Opportunities, the Offered Wage, and the Labor Supply of Married Women," American Economic Review, American Economic Association, vol. 69(5), pages 787-805, December.
    9. Mincer, Jacob, 1985. "Intercountry Comparisons of Labor Force Trends and of Related Developments: An Overview," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 1-32, January.
    10. Blau, Francine D. & Kahn, Lawrence M., 2013. "Female Labor Supply: Why is the US Falling Behind?," IZA Discussion Papers 7140, Institute for the Study of Labor (IZA).
    11. Newey, Whitney K., 1987. "Efficient estimation of limited dependent variable models with endogenous explanatory variables," Journal of Econometrics, Elsevier, vol. 36(3), pages 231-250, November.
    12. Francine D. Blau & Lawrence M. Kahn, 2013. "Female Labor Supply: Why Is the United States Falling Behind?," American Economic Review, American Economic Association, vol. 103(3), pages 251-256, May.
    13. Fuchs, Victor R, 1986. "His and Hers: Gender Differences in Work and Income, 1959-1979," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 245-272, July.
    14. Psacharopoulos, George & Tzannatos, Zafiris, 1989. "Female Labor Force Participation: An International Perspective," World Bank Research Observer, World Bank Group, vol. 4(2), pages 187-201, July.
    15. Tadashi Yamada & Tetsuji Yamada & Frank Chaloupka, 1985. "A Multinominal Logistic Approach to the Labor Force Behavior of JapaneseMarried Women," NBER Working Papers 1783, National Bureau of Economic Research, Inc.
    16. Aysit Tansel, 2001. "Economic Development and Female Labor Force Participation in Turkey: Time-Series Evidence and Cross-Province Estimates," Working Papers 0124, Economic Research Forum, revised 08 2001.
    17. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-471, July.
    18. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    19. Kucera, David & Roncolato, Leanne & von Uexkull, Erik, 2012. "Trade Contraction and Employment in India and South Africa during the Global Crisis," World Development, Elsevier, vol. 40(6), pages 1122-1134.
    20. Stephan Klasen & Janneke Pieters, 2015. "What Explains the Stagnation of Female Labor Force Participation in Urban India?," World Bank Economic Review, World Bank Group, vol. 29(3), pages 449-478.
    21. Daniel Boothby, 1984. "The Continuity of Married Women's Labour Force Participation in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 17(3), pages 471-480, August.
    22. Becker, Gary S, 1985. "Human Capital, Effort, and the Sexual Division of Labor," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 33-58, January.
    23. Piritta Sorsa & Jan Mares & Mathilde Didier & Caio Guimaraes & Marie Rabate & Gen Tang & Annamaria Tuske, 2015. "Determinants of the Low Female Labour Force Participation in India," OECD Economics Department Working Papers 1207, OECD Publishing.
    24. Rajesh K. Chauhan & Sanjay K. Mohanty & S V Subramanian & Jajati K Parida & Balakrushna Padhi, 2016. "Regional Estimates of Poverty and Inequality in India, 1993–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1249-1296, July.
    25. Jajati Keshari Parida, 2016. "MGNREGS, distress migration and livelihood conditions: a study in Odisha," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 18(1), pages 17-39, October.
    26. Kooreman, Peter & Kapteyn, Arie, 1987. "A Disaggregated Analysis of the Allocation of Time within the Household," Journal of Political Economy, University of Chicago Press, vol. 95(2), pages 223-249, April.
    27. Kapsos, Steven. & Bourmpoula, Evangelia. & Silberman, Andrea., 2014. "Why is female labour force participation declining so sharply in India?," ILO Working Papers 994949190702676, International Labour Organization.
    28. Chris Robinson & Nigel Tomes, 1985. "More on the Labour Supply of Canadian Women," Canadian Journal of Economics, Canadian Economics Association, vol. 18(1), pages 156-163, February.
    29. Ferreira Pedro Cavalcanti & da Silva Leonardo Fonseca, 2015. "Structural transformation and productivity in Latin America," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(2), pages 603-630, July.
    30. repec:ilo:ilowps:486789 is not listed on IDEAS
    31. M. Anne Hill, 1984. "Female Labor Force Participation in Japan: An Aggregate Model," Journal of Human Resources, University of Wisconsin Press, vol. 19(2), pages 280-287.
    32. Nakamura, Alice & Nakamura, Masao, 1981. "A Comparison of the Labor Force Behavior of Married Women in the United States and Canada, with Special Attention to the Impact of Income Taxes," Econometrica, Econometric Society, vol. 49(2), pages 451-489, March.
    33. Kristin Mammen & Christina Paxson, 2000. "Women's Work and Economic Development," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 141-164, Fall.
    34. Tam, Henry, 2011. "U-shaped female labor participation with economic development: Some panel data evidence," Economics Letters, Elsevier, vol. 110(2), pages 140-142, February.
    35. Schultz, T Paul, 1990. "Women's Changing Participation in the Labor Force: A World Perspective," Economic Development and Cultural Change, University of Chicago Press, vol. 38(3), pages 457-488, April.
    36. Claudia Goldin, 1994. "The U-Shaped Female Labor Force Function in Economic Development and Economic History," NBER Working Papers 4707, National Bureau of Economic Research, Inc.
    37. Ambreen Fatima & Humera Sultana, 2009. "Tracing out the U-shape relationship between female labor force participation rate and economic development for Pakistan," International Journal of Social Economics, Emerald Group Publishing, vol. 36(1/2), pages 182-198, January.
    38. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    39. Tadashi Yamada & Tetsuji Yamada, 1985. "Part-Time Work vs. Full-Time Work of Married Women in Japan," NBER Working Papers 1608, National Bureau of Economic Research, Inc.
    40. Ambreen Fatima & Humera Sultana, 2009. "Tracing out the U-shape relationship between female labor force participation rate and economic development for Pakistan," International Journal of Social Economics, Emerald Group Publishing, vol. 36(2), pages 182-198, January.
    41. Joshi, Heather & Owen, Susan J, 1985. "Does Elastic Retract? The Effect of Recession on Women's Labour Force Participation," CEPR Discussion Papers 64, C.E.P.R. Discussion Papers.
    42. Polachek, Solomon William, 1981. "Occupational Self-Selection: A Human Capital Approach to Sex Differences in Occupational Structure," The Review of Economics and Statistics, MIT Press, vol. 63(1), pages 60-69, February.
    43. Chaudhary, Ruchika. & Verick, Sher., 2014. "Female labour force participation in India and beyond," ILO Working Papers 994867893402676, International Labour Organization.
    44. Joshi, Heather & Owen, Susan J, 1984. "How Long is a Piece of Elastic? The Measurement of Female Activity Rates in British Censuses, 1951-1981," CEPR Discussion Papers 31, C.E.P.R. Discussion Papers.
    45. Franz, W & Kawasaki, S, 1981. "Labor Supply of Married Women in the Federal Republic of Germany: Theory and Empirical Results from a New Estimation Procedure," Empirical Economics, Springer, vol. 6(2), pages 129-143.
    46. Kottis, Athena Petraki, 1990. "Shifts over time and regional variation in women's labor force participation rates in a developing economy: The case of Greece," Journal of Development Economics, Elsevier, vol. 33(1), pages 117-132, July.
    47. Klasen, Stephan & Pieters, Janneke, 2012. "Push or Pull? Drivers of Female Labor Force Participation during India's Economic Boom," IZA Discussion Papers 6395, Institute for the Study of Labor (IZA).
    48. Francine D. Blau & Lawrence M. Kahn, 2007. "Changes in the Labor Supply Behavior of Married Women: 1980–2000," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 393-438.
    49. Smith, James P & Ward, Michael P, 1985. "Time-Series Growth in the Female Labor Force," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages 59-90, January.
    50. Tadashi Yamada & Tetsuji Yamada, 1984. "Part-time Employment of Married Women and Fertility in Urban Japan," NBER Working Papers 1474, National Bureau of Economic Research, Inc.
    51. Bardhan, Pranab K, 1979. "Labor Supply Functions in a Poor Agrarian Economy," American Economic Review, American Economic Association, vol. 69(1), pages 73-83, March.
    52. Goldar, Bishwanath, 2013. "Determinants of Import Intensity of India’s Manufactured Exports Under the New Policy Regime," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 48(1), pages 221-237.
    53. Sonali Das & Sonali Jain-Chandra & Kalpana Kochhar & Naresh Kumar, 2015. "Women Workers in India; Why So Few Among So Many?," IMF Working Papers 15/55, International Monetary Fund.
    54. Luke, Nancy & Munshi, Kaivan, 2011. "Women as agents of change: Female income and mobility in India," Journal of Development Economics, Elsevier, vol. 94(1), pages 1-17, January.
    55. James J. Heckman & Thomas E. Macurdy, 1980. "A Life Cycle Model of Female Labour Supply," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 47-74.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arun Jaitley, 2018. "Economic Survey 2017: Volume I, Chapter 7: Gender and Son Meta-Preference: Is Development Itself an Antidote?," Working Papers id:12445, eSocialSciences.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:98:y:2017:i:c:p:360-380. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.