Alarming figures about the impact of the COVID-19 pandemic on India’s gendered labour force participation rate published in the past week have raised alarm bells amongst economists and policymakers. As per data collected by the World Bank, between 2010 and 2020, women working in India declined from 26% to 19%. Following the onset of the COVID-19 pandemic, as per an article published by Bloomberg, the figure has declined to 9% in 2022. The female labour force participation rate is defined as the proportion of women above the age of 15 who are economically active, and that are currently employed or seeking employment. People who are still undergoing studies, housewives and persons above the age of 64 are not counted in the labour force. The labour force participation rate for females in India had already been declining before the pandemic, due to a combination of social, cultural and economic factors, which had led to an overall decrease in the availability of jobs for women. However, even 2 years after the onset of the COVID-19 pandemic, the recovery in the labour force participation rate of women has been incredibly slow, pointing to the fact that millions of Indian women have left the labour force permanently.
Women’s share in the workforce has been falling rapidly since the 2000s and has been further reduced by the pandemic
WHAT IS HAPPENING?
As per data by the Centre for Monitoring Indian Economy (CMIE), almost 17 million Indian women lost their jobs in the first month of the lockdown. It brought down the female labour force participation rate of the country to a four year low of 11%. This figure becomes even starker when you compare it to the male labour force participation rate of 71%. As the pandemic continued, the urban female labour force participation rate declined, reaching an all-time low of 15.5% in April-June, the first quarter of the lockdown, although it improved marginally to 16.1% in the September quarter. While overall India’s labour force participation rate has been improving since October 2020, the recovery has been incredibly unequal when you look at the gender division in the same.
However, it is important to note that the labour force participation rate of women in India was already struggling before the onset of the pandemic as well. As per World Bank estimates, India’s female labour force participation rate, defined as women 15 years or older, working or actively looking for a job, was amongst one of the lowest in the world. In 2020, it was estimated to be around 19%, which was significantly lower than that of its neighbours Bangladesh (35%) and Sri Lanka (31%).
During any major economic shock, such as the COVID-19 pandemic, women tend to pay the highest price. Managing director and CEO of the Centre for Monitoring Indian Economy (CMIE), Mahesh Vyas said in an interview while speaking to IndiaSpend, that even in the aftermath of demonetization, 2.4 million women disappeared from India’s economy, while 0.9 million men gained jobs during the same time. Women bore the entire economic brunt of the impact of demonetization, and a very similar trend has been observed due to the impact of the COVID-19 pandemic.
WHY ARE FEWER WOMEN BEING EMPLOYED IN THE LABOUR FORCE?
The reasons behind this sharp decline in the female labour force participation rate are a complex set of social and cultural barriers, which have continued to exist in the Indian economy for decades, and have been accentuated by the pandemic. These include household expectations from women, lack of access to education, lack of safe and affordable public transportation, rise in rates of underage marriages and the invisible role of women in the economy.
One of the key reasons for the persistent decline in female labour force participation is the social structure and role of women as caretakers in Indian families (rural as well as urban). Before the pandemic, Indian women already performed about 10 times more care work than men, around three times the global average. As per the Organisation for Economic Co-operation and Development women in India spend up to 352 minutes per day on domestic work, which is around 57 per cent more than men in any household. Another key reason is marriage. According to studies, married women also have lower labour force participation rates, and amongst rural women, the largest declines in the same were observed in the below 34-year, child-bearing age categories. Over 90 per cent of women who did not work reported that they were primarily engaged in domestic duties, as per National Sample Surveys. The COVID-19 pandemic certainly accentuated this, with an increase in the number of unplanned pregnancies for younger women, more marriages of younger women and an overall increase in the number of women giving up work to take up domestic responsibilities.
Apart from the societal and cultural norms which force women into domestic roles instead of taking up work, the lack of opportunities available to women even with moderate education/skill levels is another major contributing factor to the gender gap in employment. As per data, despite increases in both primary and secondary education levels overall, women have been continuing to lose out on opportunities in sectors which are fast-growing, such as services and manufacturing as these require technically skilled labour, and prefer men, who tend to have higher tertiary and vocational training qualifications. Automation in traditionally labour-intensive industries such as agriculture, manufacturing, and mining, has also had a disproportionate impact on women’s employment. It is estimated that around 12 million women are likely to lose their jobs due to automation in agriculture, forestry, and other allied sectors in India by 2030.
WHAT ARE THE IMPLICATIONS OF THE INCREASING GENDER GAP IN EMPLOYMENT?
A report released by UN Women, entitled “COVID-19 and its economic toll on women: The story behind the numbers” paints a grim picture of the impact of the pandemic on poverty and income inequality globally. The report highlights that the pandemic-induced poverty will widen the gender gap in poverty, which means more women will be pushed into extreme poverty as compared to men. This is particularly valid for young women in the age group of 25-34. It is estimated that in 2021, globally, there will be 118 women for every 100 men in extreme poverty, and this figure could rise to 121 poor women for 100 poor men by 2030. Being unable to address this rising gender gap in employment and labour force participation in India, will continue to impact all spheres of women’s development and the overall economic and social health of the country.
Estimates suggest that closing the employment gap between women and men in India (which is around 58%) could help increase India’s GDP by close to a third by 2050 (nearly $6 trillion as per Bloomberg Economics data).
In India, although women comprise 48% of the population, they only contribute around 17% of the GDP of the country, as compared to China, where they contribute around 40%. While across the world, women have lost more jobs than men as a result of the COVID-19 pandemic, the impact in India has been much higher and the recovery has been much lower. In fact, as per a study conducted by the International Monetary Fund (IMF), macroeconomic data reveals that adding more women to the workforce results in additional benefits for economic growth and production as women and men complement each other in the production process. As per the study, closing the gender gap could increase the GDP of countries by an average of 35 per cent (for countries in the sample). While four-fifths of these gains come from adding workers to the labour force, about one-fifth of the gains are due to the gender diversity effect on productivity.
It is very important to note that economic insecurity and loss of jobs and incomes are not the only impacts of the increasing gender gap in labour force participation rates. The loss of jobs and income and push of more and more women into extreme poverty has a multiplier effect on the quality of life of women and girls for years to come and could reverse all the gains made globally to help improve overall gender equality. It is important to develop specific policy changes which will address the root of the problem of gender disparity and boost the number of working women in the economy. Creating new jobs, along with encouraging upskilling of women thus allowing them access to pre-existing opportunities will help females gain more employment. Economists suggest adopting a female intensive growth strategy which will help increase employment opportunities for women in the middle of the education distribution. Implementation of policies that aim to promote employment of women beyond the “traditional sectors” that employ women such as education and an overall push to upskill, re-skill and increase educational opportunities are also needed.
Contributing reports by Arin Prabhat, Ashita Kaul, Kaustav Dass, Nehla Salil, and Pavitra Mohan Singh, Interns at Polstrat.