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Dropping Out, Being Pushed Out or Can’t Get in? Decoding Declining Labour Force Participation of Indian Women

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  • Deshpande, Ashwini

    (Ashoka University)

  • Singh, Jitendra

    (Thapar School of Liberal Arts and Sciences)

Abstract

The stubbornly low and declining level of labor force participation rate (LFPR) of Indian women has prompted a great deal of attention with a focus on factors constraining women's labour supply. Using 12 rounds of a high frequency household panel survey, we demonstrate volatility in Indian women's labour market engagement, as they exit and (re)enter the labor force multiple times over short period for reasons unrelated to marriage, child-birth, or change in household income. We demonstrate how these frequent transitions exacerbate the issue of measurement of female LFPR. Women elsewhere in the world face a "motherhood penalty" in the form of adverse labour market outcomes after the first childbirth. We evaluate the motherhood penalty in the Indian context and find that mothers with new children have a lower base level of LFPR, but there is no sharp decline around the time of childbirth. Blinder-Oaxaca decomposition of determinants of female LFPR suggests that none of the total fall (10 percentage points) in our study period is explained by a change in supply-side demographic characteristics. We suggest that frequent transitions, as well as fall in LFPR, are consistent with the demand-side constraints, viz., that women's participation is falling due unavailability of steady gainful employment. The high unemployment rate and industry-wise composition of total employment provide suggestive evidence that women's participation is falling as women are likely to be displaced from employment by male workers. We show that women's employment is likely to suffer more than men's due to negative economic shocks, as was seen during the fallout of demonetisation of 86 percent of Indian currency in 2016. Our analysis contests the prominent narrative that women are voluntarily dropping out of the labor force due to an increase in household income and conservative social norms. Our results suggest that India needs to focus more on creating jobs for women to retain them in the labor force.

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  • Deshpande, Ashwini & Singh, Jitendra, 2021. "Dropping Out, Being Pushed Out or Can’t Get in? Decoding Declining Labour Force Participation of Indian Women," IZA Discussion Papers 14639, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp14639
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    2. Ashwini Deshpande & Shantanu Khanna & Daksh Walia, 2024. "An Indian Enigma? Labour market impacts of the world’s largest livelihoods program," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(3), pages 1-20, September.
    3. Bussolo,Maurizio & Ezebuihe,Jessy Amarachi & Munoz Boudet,Ana Maria & Poupakis,Stavros & Rahman,Tasmia & Sarma,Nayantara, 2022. "Social Norms and Gender Equality : A Descriptive Analysis for South Asia," Policy Research Working Paper Series 10142, The World Bank.
    4. Panchanan Das, 2023. "Creation and Destruction of Jobs in Urban Labour Market: Role of Gender, Caste and Religion in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 225-237, March.
    5. Esha Chatterjee & Reeve D. Vanneman, 2022. "Women's Low Employment Rates in India: Cultural and Structural Explanations," Population and Development Review, The Population Council, Inc., vol. 48(2), pages 445-474, June.
    6. Aparajita Dasgupta & Ashokankur Datta, 2023. "Gendered Transport Subsidy and its Short Run Effect on Female Employment: Evidence from Delhi’s Pink Pass Scheme," Working Papers 105, Ashoka University, Department of Economics.
    7. Jitender Singh, 2023. "Unemployment Fluctuations in Urban Labour Market in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 81-111, March.
    8. Jyotirmoy Bhattacharya, 2023. "Indian Urban Workers’ Labour Market Transitions," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(2), pages 471-494, June.
    9. Amit Basole, 2022. "Structural Transformation and Employment Generation in India: Past Performance and the Way Forward," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(2), pages 295-320, June.
    10. Li, Nicholas, 2023. "Women’s work in India: Evidence from changes in time use between 1998 and 2019," World Development, Elsevier, vol. 161(C).
    11. Shrestha, Samyam & Kadam, Aditi & Gaddis, Isis & Javed, Amna, 2024. "Regional Integration and Gendered Labor Market Outcomes: Evidence from Two Nationwide Highway Networks in India," 2024 Annual Meeting, July 28-30, New Orleans, LA 344057, Agricultural and Applied Economics Association.
    12. Swati Dhingra & Fjolla Kondirolli, 2022. "Unemployment and labour market recovery policies," Indian Economic Review, Springer, vol. 57(1), pages 223-235, June.
    13. Bharti Nandwani & Manisha Jain, 2024. "Access to clean cooking fuel and women outcomes," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2024-017, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    female labour force participation rate; employment; social norms; India; labour demand;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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