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When It Comes to Jobs, Where Have All the Women Gone?

Oct 24, 2016

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The Labour Bureau based out of Chandigarh released the Report on Fifth Annual Employment - Unemployment Survey (here in referred to as the Report) in mid-September 2016.

One piece of news reported based on the report was that the unemployment rate was at a five-year high of 5 per cent. This as I wrote in the October 7, 2016, edition of my letter What the Media Did Not Tell You About India's High Unemployment Rate (subscription required), this was really not the most important point that should have been reported out of the Report.

Having said that, there was another important point that the media seems to have missed out on. In today's column, I will discuss that point.

As per the Report, the labour force participation rate for women fell to 23.7 per cent in 2015-2016. It was at 25.8 per cent as per the Report on Fourth Annual Employment - Unemployment Survey of 2013-2014. Hence within a period of two years, the labour force participation rate for women has come down by 210 basis points.

What does this mean? In 2013-2014, 25.8 per cent of women aged 15 years and above were either working or seeking work. In 2015-2016, this was down to 23.7 per cent. Hence, fewer women were working or looking for a job in 2015-2016 than in 2013-2014. In rural India, the rate was 26.7 per cent whereas in urban India it was 16.2 per cent.

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Now compare this with the labour force participation rate for men in 2015-2016. It stood at 75 per cent. In 2013-2014, it had stood at a more or less similar 74.7 per cent.

Multiple reasons have been offered for fewer women working as well as seeking work. One reason offered has been that it is difficult to measure the participation of women in the labour force, given the kind of jobs they do. Women are a major part of home-based work and agriculture labour.

This difficulty of measurement leads to a lower labour force participation rate for women. Nevertheless, the thing is that this difficulty of measurement would have been there for 2013-2014 survey and for 2015-2016 survey. Hence, without this difficulty of measurement we would have had a higher labour force participation rate for women in 2013-2014 as well as 2015-2016.

But there would still be a difference between the two years. Hence, it is easy to conclude that the labour force participation rate for women has fallen, despite the difficulty of measurement.

Another reason offered has been that there aren't enough jobs going around for everybody and in the process the men are squeezing out women out of jobs.

A third reason offered is that more and more women are continuing with their education. This is a trend that has been seen over the years among the rural females between the ages of 15 to 24. In 1993-1994, 9 per cent of the females were attending educational institutes. This rose to 15 per cent in 2004-2005 and 20 per cent in 2011-2012.1 The figure would have only risen since 2011-2012.

This at some level explains why fewer women are working or seeking work. But once the women who are continuing with their education complete their education, they will start entering the workforce. This will increase the labour force participation rate for women and the demand for jobs.

As I have written in the past, the Indian economy isn't creating jobs for the bulk of individuals entering the workforce every year. With more women getting education and entering the workforce, the problem will only increase in the years to come.

But the major reason for the fall in the labour force participation rate for women is slightly more complicated than this. Allow me to explain.

The mandate of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is to provide at least 100 days of guaranteed work, during a financial year to adult members of every rural household who are willing to do unskilled manual work. The idea is to "enhance the livelihood security of the rural poor through the generation of wage employment opportunities in works leading to the creation of durable assets".2

The MGNREGS was created to implement the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Interestingly, women make up for a bulk of labourers in MGNREGS. In 2015-2016, the participation rate of women in MGNREGS was at 55 per cent. Under MGNREGS, there is no discrimination in the payment of wages based on gender. Over the years, this has basically pushed up the wage rates for women. Also, the scheme offers work within a five kilometre radius of where an individual lives, which means women can find work within the vicinity of where they live.

With this, women have become choosy about the kind of work they take on. As Sunita Sanghi, A Srija, and Shirke Shrinivas Vijay write in a research paper titled Decline in Rural Female Labour Force Participation in India: A Relook into the Causes: "a woman no longer prefers working as an unpaid worker or a helper or as a casual worker unless the work is remunerative (as in MGNREGA)."

The trouble is that such work is not easily available in rural India. Take the case of MGNREGS. The scheme is mandated to provide 100 days of work per household, but in 2015-2016, only 10.1 per cent of the households were provided work for at least 100 days. And that is clearly a problem. This explains why the labour participation rate for women crashed from 29.1 per cent in 2013-2014 to 26.7 per cent in 2013-2014.

This has been an unintended consequence of the MGNREGS. The larger issue is that if the patriarchal structure of the society has to change, more and more women need to enter the workforce. The global average of the labour force participation rate for women is 50 per cent. In East Asia it is at 63 per cent.3

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1. Sunita Sanghi, A Srija, and Shirke Shrinivas Vijay, Decline in Rural Female Labour Force Participation in India:
A Relook into the Causes, VIKALPA The Journal for Decision Makers 40(3) 255-268 © 2015 Indian Institute of Management, Ahmedabad

2. Frequently Asked Questions on MGNREGA Operational Guidelines, 2013, Ministry for Rural Development and National Institute of Rural Development and Panchayati Raj.

3. Sonali Das, Sonali Jain-Chandra, Kalpana Kochhar, and Naresh Kumar, Women Workers in India: Why So Few Among So Many?, IMF Working Paper, March 2015

Vivek Kaul is the Editor of the Diary and The Vivek Kaul Letter. Vivek is a writer who has worked at senior positions with the Daily News and Analysis (DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. The latest book in the trilogy Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System was published in March 2015. The books were bestsellers on Amazon. His writing has also appeared in The Times of India, The Hindu, The Hindu Business Line, Business World, Business Today, India Today, Business Standard, Forbes India, Deccan Chronicle, The Asian Age, Mutual Fund Insight, Wealth Insight, Swarajya, Bangalore Mirror among others.

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2 Responses to "When It Comes to Jobs, Where Have All the Women Gone?"

mohan iyer

Oct 27, 2016

Dear Vivek,
you are right in your appreciation. i woulike to add one important addition to your list.
the termination of pregnancy in case of results forecasting girl child. Obvious from the ratio of male to female ratio continuously displaying the same. It will soon touch 10:8 in favor of males
thanks & regards.
Mohan iyer

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ranjit

Oct 24, 2016

We do not have MEDIA now-a-days; we have MODIA.

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