A Sectoral Approach to Boost Women Participation in the Labour Force

Women’s labour is a rich and valuable resource for a country as it can significantly boost growth prospects and improve socio-economic conditions as also ensure better outcomes for the next generation. Therefore, enhancing women participation in the labour force is a critical endeavour for driving overall social and sustainable development. A recent research paper, titled “Declining Female Labour Force Participation in India: Concerns, Causes and Policy Options”, brought out by the Confederation of Indian Industry (CII) suggests adopting a sectoral approach to boost women participation in India.

Despite positive growth and development parameters in the last 20-25 years, India has experienced a continuous decline in its female labour force participation rate (FLFPR). The total FLFPR declined sharply from 42.7% in 2004-05 to 31.2% in 2011-12 which further declined to 27.4% in 2015-2016. In 2013, International Labour Organization (ILO) ranked India’s FLFPR at 121 out of 130 countries, one of the lowest in the world. India also secured a poor rank in the Global Gender Gap Report 2017 by World Economic Forum, where it was ranked 108 out of 144 economies.

A major factor responsible for pulling down the overall FLFPR was the drop in FLFPR in rural areas, specifically prominent in the working age group of 20-44 years. On the other hand, the urban FLFPR which has been historically lower than rural FLFPR, has fluctuated.

In terms of age specific LFPR, male LFPR is significantly higher than females across all age groups and across rural and urban areas. While 96% of Indian males are in the labour force during the peak working age of 25 to 60 years, the number is only around 37-48% for rural females and even lower at around 25-28% for urban females for different age-groups.

A highlight of the paper is exploration of trends in employment across sectors. The overall sectoral analysis reveals that the sectors with the highest participation of women are manufacturing, certain services and the sector of transport, storage and communications.

Not surprisingly, a majority of the rural women, around 75%, is employed in agriculture and allied activities. A higher percentage of rural women, around 9.8%, are engaged in manufacturing as compared to 8.1% of rural men. Other major sectors of employment for rural women include construction and services.

For urban women, major sectors of employment include services, manufacturing and trade, hotel and restaurant. The proportions of urban women engaged in services and manufacturing sectors were higher than that of urban men. Specifically, around 40% of total urban women are engaged in services as compared to 21% of urban men, and 29% of urban women are engaged in manufacturing as compared to 22% of urban men.

The principal cause for the declining FLFPR relates to stage of development, which suggests a U-shaped relationship between economic development and FLFPR where FLFPR first declines and then rises. Rising household incomes and increased participation in education also cause women to drop out from labour force.

The education-FLFPR link, however, appears to be somewhat tenuous as better literacy has not led to higher labour force participation. Additionally, other factors such as increased mechanization of agriculture, lack of quality jobs, and unfavourable working conditions as well as social factors, such as stigma related to women working far away from home and perceptions of women as primary caregivers in the family, are also leading causes of the declining FLFPR.

Recommendations

Recommendations are divided into two parts, pertaining to sectoral issues as well as key enablers.  Based on sectoral analysis, the sectors with the best employment opportunities for women are identified as manufacturing and certain services.

Sectors

Manufacturing: Women’s participation in the manufacturing sectors has increased substantially over the years and efforts must be directed to ensure that this trend continues. Employment intensive sub-sectors such as textiles, apparel, food & beverage, furniture, pharmaceuticals and computer and electronic products, are characterized by high employment elasticity and have exhibited high growth rates in the past few years. These offer good avenues for women, provided that measures are taken for their participation. According to a CII analysis, the top manufacturing sectors could create more than 21 million jobs by 2025 with the right promotional policies.

Per 1000 Distribution of Usually Employed Persons: Manufacturing

 

Services: In the services sector, sub-sectors such as beauty and wellness, healthcare, and tourism are projected to add more than 26 million workers by 2025 and are of high interest for women. More than 40% of urban women are employed in various services. Similarly, rural females need to diversify out of agriculture into services.

Per 1000 Distribution of Usually Employed Persons: Services

Other sectors: Increasing numbers of women are also joining sectors such as construction and communications, and financial services and greater job opportunities should be created in these sectors. More women need to be encouraged to join professional, scientific and technical activities. The bias against women in these sectors needs to be eliminated as these fields have a lot to gain from greater participation of women.

Per 1000 Distribution of Usually Employed Persons: Construction

Enablers

The paper also makes policy recommendations with respect to the various employment enablers that would equip women with the necessary capacity required to work in these sectors.

Skill development: Skill training is of paramount importance, especially in rural areas, and close to the place of residence of women. Courses offered should be interesting, relevant and mapped to local area requirements.

Supportive interventions: Access to skills needs to be followed up with assistance for accessing finance, marketing, etc. Equally important are the roles of digital and financial literacy which would encourage women to take up more technology-driven work in all sectors including electronics and IT and financial services.

Entrepreneurship development: Only 13.75% of total entrepreneurs in the country are women. Promoting greater women entrepreneurship by undertaking necessary training activities and creating financial channels is essential.

Workplace conditions: Providing quality jobs and improving workplace conditions through various incentives such as safe and inexpensive transport, clean washrooms, appropriate leave policies, affordable child care policies, flexible working hours and equal pay could go a long way in encouraging women to join the labour force.

Financial access: Providing loans and microfinance to women that cater to their diverse needs, with income generating focus, can add more women to the workforce. Schemes such as Stand-up India are in the right direction.

Healthcare: With anaemia and other illnesses impacting women’s energy, better health policies targeted towards improving women’s nutrition and health and strong awareness dissemination programmes on economic empowerment of women are also important enablers.

Better data: Finally, in the present situation, a multiplicity of labour surveys and lack of recent data are major impediments in carrying out fruitful policy analysis. Generation of latest and reliable data must be given a priority for undertaking effective policy driven research.

Greater women participation in the labour force is imperative not only for achieving higher growth but for attaining overall social and inclusive development and therefore must be a top priority for policymakers in the country. The measures suggested in the paper could greatly encourage women to take up more work and provide a substantial boost to female labour force participation in India.

Report link: Declining Female Labour Force Participation in India: Concerns, Causes and Policy Options : A CII Discussion Paper

 

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