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Women’s work participation continues to decline: Evidence from the Periodic Labour Force Survey, 2017-18

Authors: Anjana Thampi and Ruchika Chaudhary

Date: 13 August 2019

The recently released Periodic Labour Force Survey (PLFS) – a new series of employment-unemployment estimates for 2017-18 produced by the NSSO that substituted the erstwhile Employment-Unemployment surveys (EUS) – clearly reveals that the declining trends in work participation rates of women continue to persist. Some of the PLFS estimates were available through a data leak in the media before the report was officially released by the government, and were mired in controversies of reliability as well as comparability with the previous EUS series. However, the recent release of the report by the government and deliberations on it by experts (such as Dr. Pronab Sen, former and the first Chief Statistician of India) clearly tell us two important facts: a) the headline indicators provided by the PLFS are comparable with the previous rounds of the EUS not only at the all-India level but also at the level of the states; and b) it follows that women’s work participation rates continue to decline for both rural and urban areas.

The report provides important trends on some of the important labour market indicators. Among the employment indicators, the one that attracted attention even before the report was officially released[1] was the unemployment rate – at 6.1 percent, this rate was at its highest since at least 1972–73 (when the NSS EUS was first conducted). The overall labour force participation rate[2] (LFPR) was just below 50 per cent in 2017-18, declining by about 14 percentage points from 2004-05.

Much has been discussed about the low and declining female labour force participation rate (FLFPR) in India, and multiple explanations advanced towards explaining this trend, such as increased education levels among women, rising household income (income effect), measurement issues (substantially higher proportion of women attending to domestic duties) and a general decline in the employment opportunities for women (Mehrotra and Sinha, 2017; Klasen and Pieters, 2015; Chaudhary and Verick, 2014; Kapsos et al., 2014; Lahoti and Swaminathan, 2013; Mazumdar and Neetha, 2011). As stated in the latest PLFS report, the trend has in fact worsened for rural women since 2011-12, with the FLFPR coming down to  25 percent in 2017-18[3], whereas for urban women, the rate has remained the same at about 20 percent (though most of the decline occurred between 2004-05 to 2009-10). But unemployment rate for urban women has substantially increased from 5 percent in 2011-12 to 11 percent in 2017-18 (Figure 1). Also, the labour force participation rate came down significantly for the (15-29) age group, relative to the other age cohorts. As is reported in the PLFS report, the decline was greater for young men compared to young women, which points to the prevailing job crisis in the Indian labour market, more so for educated young people.

Figure 1: Key labour market indicators for men and women across rural and urban areas, 15+ years, usual status (ps+ss), (2004-05 to 2017-18)

1.Labour force participation rate (%)

 

2. Workforce participation rate (%)

3. Unemployment rate (%)

Source: PLFS Annual report, MoSPI, GoI, 2019

Note: ps: principal status; ss: subsidiary status

Additionally, rural women’s labour force participation rate declined by as much as 25 percentage points between 2004-05 and 2017-18. As a result, the rural FLFPR – which was double the urban FLFPR in 2004-05 – is now only a little higher than the urban FLFPR. What’s even more striking is that the FLFPR for young rural women aged (15 – 29) years has declined so sharply that it is now lower than the FLFPR for urban women in the same age group (Figure 2). The decline in FLFPR is mostly driven by rural areas, and therefore calls for a deeper analysis of the situation behind this trend.

Figure 2: Women’s labour force participation rate (%) by age cohorts

Source: PLFS Annual report, MoSPI, GoI, 2019

Apart from the disturbing trends outlined above, a positive development in women’s employment is seen in the case of regular salaried employment since 2011-12, as their proportion has increased significantly across both rural and urban areas, albeit more so in case of urban women (and very few women work as regular salaried workers in rural areas) (Figure 3).

Figure 3: Composition of the women workforce in rural and urban areas (%), all ages

Source: PLFS Annual report, MoSPI, GoI, 2019

However as can be seen from Table 1, self-employment is massive for rural women (58 percent), followed by casual labour (32 percent) and regular salaried (10.5 percent). It is important to analyse the characteristics of rural self-employed women workers, as a majority of them work as contributing family workers/unpaid helpers in family enterprises (39 percent), compared to only 10 percent of the men (there are significantly higher proportions of own-account workers and employers among men, across both rural and urban areas). These unpaid family workers contribute to the production economy without receiving any income/wages in return, and are more likely to lack decent working conditions, adequate social protection, and formal work arrangements. Therefore, this puts women in vulnerable situations, and has larger implications for reducing gender inequality.

Table 1: Percentage distribution of workers by status in employment, usual status, all ages, 2017-18

Category Rural Urban
Men Women Men Women
Own-account worker and employer 48.0 19.0 34.9 23.7
Helper in household enterprise 9.8 38.7 4.3 11.0
All self-employed 57.8 57.7 39.2 34.7
Regular wage salaried 14.0 10.5 45.7 52.1
Casual labour 28.2 31.8 15.1 13.2
Total 100.0 100.0 100.0 100.0

Source: PLFS Annual report, MoSPI, GoI, 2019

Besides, if we look at the industrial distribution of women workers across rural and urban areas, it would highlight the importance of manufacturing and other services sector (namely, financial, insurance and real estate activities, health and education, and other services) (Table 2). This latter category includes domestic workers (maids, cooks, babysitters, and so on), women in beauty and wellness service activities, and workers in call centres. But domestic work is one segment which grew relatively faster over the last two decades, due to increased demand from middle-income families in the urban areas. These domestic workers are mostly uneducated or less educated migrants from poor rural areas, and in most cases their working and living conditions are alarming.

Table 2: Industrial distribution of women workers across location (%), usual status, all ages

Category EUS 68th (2011-12) PLFS (2017-18)
Rural Urban Rural Urban
Agriculture 74.9 10.9 73.2 9.1
Mining & quarrying 0.3 0.3 0.2 0.2
Manufacturing 9.8 28.7 8.1 25.2
Electricity, water, etc. 0.1 1.0 0.0 0.6
Construction 6.6 4.0 5.3 4.1
Trade, hotel & restaurant 3.0 12.8 4.0 13.0
Transport, storage & communications 0.2 2.7 0.3 3.3
Other services 5.2 39.6 8.9 44.4
Total 100.0 100.0 100.0 100.0

Source: PLFS Annual report, MoSPI, GoI, 2019

Furthermore, since more than 90 per cent of workers in India are informally employed, and its critical to assess the different components which are indicative of this phenomenon. If we examine the different dimensions of informality, we notice that the proportions of regular wage/salaried women who did not have any written contract has increased since 2011-12 (67 percent in 2017-18, compared to 65 percent in 2011-12). And the situation is more alarming in case of urban women, of whom more than 70 percent did not have a written job contract in 2017-18. Moreover, half of the total non-agricultural regular salaried workforce did not have any social security benefits (55 percent of rural women and 50 percent of urban women) in 2017-18. This raises concerns over the quality of regular work that is being created and thus the increases mentioned previously, in this category needs to be viewed with caution.

The PLFS clearly shows that fewer women are participating in paid market activities, and even when they do join the labour market, they end up in informal jobs, working mostly as unpaid family workers, or as regular salaried workers without job security or social security. Policies should be framed based on the emerging trends and focusing on the overall employment crisis. They should be able to address the constraints faced by women, and enable women to participate in the labour market in large numbers, and particularly in formal productive employment which gets them decent livelihood opportunities.

[1] https://www.business-standard.com/article/economy-policy/unemployment-rate-at-five-decade-high-of-6-1-in-2017-18-nsso-survey-119013100053_1.html

[2] People who are recorded as either ‘working’ or ‘seeking or available for work’ comprise the labour force.

[3] It is surprising to note that the proportion of women attending to domestic duties and allied activities also came down in 2017-18, relative to previous NSS rounds. This requires detailed analysis as the increased proportion of women in this category was cited as one of the reasons for the earlier decline in their participation rates.

Making Skill India Work for Women

Authors: Charity Troyer Moore and Soledad Prillaman

Date: 26 April 2019

By now, the facts of Indian women’s labor market participation that should be jarring have become rote: Indian women, particularly rural women, have dropped out of the labor force in a period of strong economic growth; Indian women’s labor force participation rates are lower than all other G20 countries outside of Saudi Arabia; and the latest Labour Force Surveys suggest that, even at less than 24% overall1, female labor force participation continues to decline.Frequently, Skill India is mentioned as a means of altering this pattern for young women by bringing them into the workforce. Such skilling programs can give women useful training and directly connect them with employers who are eager to hire them. The most recent NSS employment data (2011-12), suggests that young, unmarried women are a particularly high potential group: they have very low labor force participation rates, but report relatively high interest in working—32% of respondents in rural areas and 28% of respondents in urban areas who were out of the labour force reported willingness to work (Pande, Moore, & Fletcher, 2017). Data from a small survey we conducted with skills trainees in Madhya Pradesh further substantiates this: women were less likely to be working than men, but unemployed women and men reported similar levels of job search, even for jobs that required migration2.While skilling provides substantial opportunities for young women’s economic empowerment, constraints to women’s participation in such programs abound. In a context where income- generating opportunities are absent for women, norms have emerged that reinforce this exclusion and impose substantial barriers to women’s entry. Even when quotas for women’s participation in skilling programs exist, our research has highlighted the myriad of challenges women face to join skilling and then in translating this skilling into a longer-term employment opportunity. In a survey of 2,610 former skilling trainees, we see a clear leaky pipeline for women. Women are less likely to receive job offers at the end of skilling, highlighting potential discrimination. On the supply side, female trainees are also less likely to accept job offers they do receive (see figure 1). Contrary to common expectation, women that join jobs are just as likely to stick with them as men. While this provides some scope for optimism, all trainees report disappointing employment outcomes overall: one year after skilling, only 1 in 5 former trainees still earned an income.

So what keeps women from joining skilling and remaining in jobs? Our research to date, which has included a small survey in central Madhya Pradesh of potential trainees and their parents3, a phone survey of former skilling participants from seven major states, and analysis of administrative data from Odisha, a top skilling performer, point to several clear constraints to women joining skilling:

 First, women’s skilling and labor force decisions are made in consort with, and typically with permission from, family members. These coordinated decisions often inhibit women’s ability to take-up skilling and employment. Despite women wanting to work at high rates, male family members often retain more gender-biased attitudes towards women’s work: from our small survey in Madhya Pradesh 31% of fathers and 42% of male youth did not believe that women should go out to work. In our phone survey of former trainees, the top reason women reported not accepting a job was that their family did not give them permission to do so (see figure 2).

Males, in contrast, most frequently declined jobs because of dissatisfaction with compensation. Similar dynamics were reported with respect to leaving post-skilling employment, where women dropped out as a result of family pressure and men dropped out principally because of job-related dissatisfaction.

Second, with the growing demand for skilled work in urban cities, migration raises major concerns about safety for both women and their families. In a small survey of training-eligible youth in central Madhya Pradesh, 69% of females reported it is unsafe to live away from home even during training, compared to 31% of males. Male guardians also overwhelmingly report they believe crime is more likely to happen in urban areas than the village (85%), and both violent and non-violent crimes are more likely to happen to women (84% and 86%, respectively), suggesting they would be relatively more concerned for their female family members’ safety post-migration than males’. These concerns, due to the influence of family members on girls’ employment decisions, have limited women’s take-up of skilling – when women are offered jobs outside their district and state, their job acceptance rates decline. The same does not hold for males.

Third, potential trainees seem to have inaccurate expectations regarding their wages in jobs post- skilling, which may limit the perceived value of skilling for women. This discrepancy is clearly a barrier for males’ skilling success, but may also keep family members from allowing women to accept job offers after skilling. In our survey of potential trainees in rural Madhya Pradesh, male youth reported they would need to earn 13,827 INR per month to accept a job in Bhopal and women report they would need to earn 12,231 INR per month. These reservation wages nearly double when considering migration to Delhi: male youth report that they would need to earn 26,788 INR per month to relocate to Delhi and female youth require only 20,740 INR per month on average4. In reality, the average monthly salary offered to DDU GKY trainees for jobs in Delhi is 7,800 INR and 6,550 INR in Bhubaneshwar.

These three critical facts pointed our research team to the importance of two crucial pieces of the female skilling and employment puzzle: First, given high leakage along the “skilling pipeline”, it is necessary to identify which women are most interested and likely to take up training, accept jobs, and remain in employment prior to investing in training them. Second, to involve women in skilling and employment, families need accurate information and support help them feel comfortable giving women permission to join skilling. To address these issues, our team at EPoD India at IFMR, along with researchers from Harvard and Oxford, is working with the state of

4 In contrast, average monthly wages for the youth who were employed was Rs. 8,771 for male youth and only Rs. 1,527 for female youth.

Odisha to test whether local self-help group (SHG) leaders can better identify willing women workers (and supportive families), and provide potential trainees and their family members with information to encourage women to take up skilling.

The theory of change behind such an approach assumes that SHG leaders have networks that will be able to identify willing trainees. They will have an insider’s perspective on which potential candidates will be successful since they can screen for characteristics related to labor market success –a family’s need or even potential participants’ individual traits – in ways that a recruiter from outside the village cannot. These local leaders are likely also well-connected to potential trainees’ families and can serve as an important liaison between training centres, employers, and the government.

Our project takes place across 317 Gram Panchayats in Ganjam and Nayagarh districts in Odisha. Through an RCT, we study Odisha’s SHG-linked recruitment model. We compare SHGs across three groups: In some randomly selected areas, training centers recruit participants using traditional methods of sending center staff to rural villages. The two other randomly selected groups employ the SHG-linked recruitment approach, where local female SHG members recruit trainees instead of training center staff. These two groups differ in terms of the training they received – one group of SHG recruiters received the standard training and the other group received additional information on male and female trainees’ employment prospects in different locations, and potential wages across locations. This additional information we hope will help equip these leaders with more accurate information to share with families about young women’s employment prospects post training. While the study is on-going through 2019, we are optimistic that this study will help us understand both the efficacy of the SHG-linked recruitment model, as well as to identify strategies to address some of the barriers that still keep women from benefitting fully from Skill India.

Charity Troyer Moore is the India Research Director for Evidence for Policy Design at the Harvard Kennedy School. She leads research-policy engagements with a variety of entities in India to ensure that research is attuned to the problems facing policymakers and integrated into policy design and program implementation.

Soledad Prillaman is a Postdoctoral Prize Research Fellow in Politics at Nuffield College at the University of Oxford. Her research interests lie at the intersections of comparative political economy, development, gender, and the politics of the welfare state, with a focus in South Asia

 

Sources:

Artiz Prillaman, Soledad, Rohini Pande, and Charity Troyer Moore. “Can Skill India Help Rural Women Integrate into the Labor Force? Learning from a Successful State.” 2018. Draft working paper prepared for the International Growth Centre.

Artiz Prillaman, Soledad, Rohini Pande, Vartika Singh, and Charity Troyer Moore. “What Constrains Young Indian Women’s Labor Force Participation? Evidence from a Survey of Vocational Trainees.” 2017. Available here.

Evidence for Policy Design and IFMR. “Women and Work in India: What do we Know?” 2016. Policy Brief.

Pande, R., Moore, C. T., & Fletcher, E. K. (2017). Women and Work in India: Descriptive Evidence and a Review of Potential Policies. CID Working Papers 339.