The latest Periodic Labour Force Survey (PLFS) data shows a significant 16% increase in the overall Labour Force Participation Rate (LFPR). It also shows a decline in unemployment rate for the working age group (15-59 years) population over the period 2017-18 to 2022-23. But a gender wise break up reveals that the rise was majorly led by the increasing participation of working age women, compared to men and in rural areas compared to urban areas. Moreover, age group wise bifurcation shows that elderly women participated more in the job market compared to younger women (15-29 years) over the same period. But even among the elderly population a strict gendered division is observed, as almost all (97%) elderly men work in India whereas only half of the women are actively engaged in the labour market in 2022-23.

This year, two labour force survey reports were released. The one in May, 2023, was based on the survey conducted during July 2021-June 2022 and the recent one in October 2023, on the basis of survey piloted during July 2022-June 2023. The National Sample Survey Office (NSS) has been publishing the annual PLFS data in India since April 2017, in keeping with the recurrent prerequisite of labour market indicators.

Delving Deeper

A closer look at the data reveals that the biggest increases in women’s LFPR were seen amongst those with low education levels - non-literates, primary level, and middle school in both rural and urban areas. It is also worthwhile to mention that marriage increases men’s chances to join the labour force more compared to unmarried and others. Widowed and divorced women had greater participation in the labour force compared to unmarried and married women. Over the period, whatever increase in men’s LFPR is observed is majorly because more unmarried men joined the labour market. Surprisingly, more married women have started participating in the labour force in urban areas. By contrast, in rural areas both married and unmarried women participated more in the self-employment activity overtime.

But it is important to not get too ecstatic by what is apparently visible through the data. While the rising LFPR indicates that more women are looking for jobs in India, the quality of jobs created is a concern as it is majorly distress-driven. This is confirmed by the nature of their employment, i.e. increasing share of self-employment in agriculture and decline in real wages. Additionally, the rise in LFPR because of increasing demand for labour has different implications compared to the rise in LFPR because of the household income effect. The recent trend points to the latter and a reverse structural change is observed in the Indian economy which forced women to take whatever job available to support the family.

The unusual increase of LFPR amongst rural women during the recent time is not due to the increasing demand for labour. It can rather be explained entirely by the income effect, i.e. rural women took up low-paid, informal work to supplement family income during the crisis. The wage/earning data also validates the argument of distress-driven job creation for Indian women during recent times.

A more in-depth review of the data reveals that this entire increase in women’s LFPR is owing to self-employment, as the share of those working as salaried employees and casual wage labourers has substantially declined for women in both rural and urban areas over the period. Industry-wise break up indicates an increasing engagement of women in agriculture and allied activities as men move out from agriculture to join the construction sector. The share of other sectors like manufacturing, trade, hotels and restaurant and other services has remained more or less constant for men in both rural and urban areas.

Breaking It Down Further

Likewise, the share of women engaged in different service sectors has significantly reduced in rural as well as urban areas. The falling share of women in the service sector and an increase in agriculture can be termed as reverse structural change. One should also be cautious of interpreting it as a movement from service to agriculture, as the nature of employment is completely different in these two sectors.

Further breakup of women LFPR by religion indicates that over the entire period, Muslim women’s participation in the job market was the lowest. Only 22% and 18% Muslim women participated in the job market in rural and urban areas respectively, in 2022-23. Among different social groups, over the entire period, scheduled tribe (ST) women’s LFPR was the highest followed by scheduled caste (SC) women in both rural and urban areas. The lowest participation of Muslim women in the job market could be due to their religious norms and cultural practices which tied them to home, whereas matrilineal culture empowers women of the marginalized group to participate more in the job market.

The self-employed women experienced a fall in both absolute and real earnings. The gender earnings gap for the self-employed has increased by 29% over the period 2017-18 to 2022-23. Self-employed women received less than half of men’s earnings indicating a higher gender income gap as compared to other categories of workers in 2022-23. Similarly, both men and women salaried employees also experienced a decline in real wages. Women working as regular and casual wage workers faced a higher gender wage gap in rural areas compared to urban ones.

In conclusion, though the PLFS data indicates a significant increase in women’s labour force participation rate, too much emphasis on it can be misleading as one should also look into the types of jobs created out of it along with the average wage/earnings figure.