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She Works Hard for the Money: Debt Burden and Labour Supply in India

Author

Listed:
  • Arnaud Natal

    (BSE (University of Bordeaux, CNRS, and INRAE), French Institute of Pondicherry (IFP))

  • Christophe Jalil Nordman

    (IRD, LEDa-DIAL (IRD, CNRS, and PSL Research University), France, IFP (Pondicherry, India))

Abstract

For over 40 years, labour supply has been at the heart of empirical microeconomics, but few studies have examined the impact of household debt burdens on labour supply, and almost none on countries of the Global South. This research fills this gap by examining how debt burden - measured by the debt service ratio - affects labour supply, in particular hours worked, among more than 3200 individuals in rural Tamil Nadu, India, between 2016-17 and 2020-21. Using a Heckman correction with lagged debt ratios and fixed effects to account for unobserved factors and limit reverse causality, the study highlights a striking result: women increase their labour supply to repay household debt, regardless of which household member incurred it. Our results challenge the commonly held view in the South that women’s work is synonymous with empowerment, suggesting that it may be the result of economic pressures rather than a move towards autonomy.

Suggested Citation

  • Arnaud Natal & Christophe Jalil Nordman, 2025. "She Works Hard for the Money: Debt Burden and Labour Supply in India," Working Papers DT/2025/01, DIAL (Développement, Institutions et Mondialisation).
    • Handle: RePEc:dia:wpaper:dt202501
    as

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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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