The recent increase in women’s engagement in India’s labour force has been primarily fuelled by self-employment, possibly influenced more by distress than economic growth, revealed a study.
According to the State of Working 2023 report from Bangalore-based Azim Premji University, self-employment among women increased by 14%, reaching nearly 65% between the quarter ending in June 2018 and the quarter ending in December 2022.
“If participation rises due to economic growth and rising labour demand, (it) has very different implications than if it rises due to falling household incomes, which force women into self-employment,” the report said.
Although more women transitioned into self-employment, the earnings from this form of work amounted to only 85% of what they were in the quarter ending June 2019.
India’s female labour force participation increased to just under 33% in the aftermath of the Covid pandemic, up from 30% before the pandemic, but it still remains relatively low. Despite a narrower wage gap compared to the early 2000s, as of 2021-22, women were earning only 76% of what men earned.
The university’s research also revealed that economic growth in India has been less reliant on job creation compared to the average for developing countries.
“Over the long run, growth in gross domestic product (GDP)and employment growth have been uncorrelated in India suggesting that policies oriented towards achieving faster GDP growth will not necessarily speed up job creation,” the report said.
The report noted that unemployment is especially pronounced among the youth, with the unemployment rate among graduates in the under-25 age group reaching as high as 42.3% as of June 2022. However, this rate gradually decreases with age, dropping to 22.8% for the 25-29 age group and further declining to 9.8% for the 30-34 age group.
The government of India has recently put forward a proposal to allocate one-third of the seats in the lower house of parliament and state assemblies for women.