Declining women’s participation in a growing economy

Over the last few decades, women’s economic participationhas declined in Jammu and Kashmir despite rising female literacy rates andpositive GDP growth rate. The withdrawal of females from the labour force is aserious concern as it can hurt our long-run growth trajectory. This articlepresents several dimensions of the issue and suggests what the government cando to achieve gender balance in the workforce.    

The women’s availability for work is measured by femalelabour force participation rate (FLFPR). Labour force refers to persons who areeither working or looking for work. The LFPR is defined by the National SampleSurvey (NSS) as the number of persons in labour force per thousand persons. Thefemale LFPR in rural areas of J&K has declined from 98 (per 1000 person) in1993-94 to 49 (per 1000 persons) in 1999-2000. The 68th NSS survey (2011-12)shows the FLFPR stagnating at 50 per 1000 persons. The FLFPR in the urbanareas, too, had declined from 96 per 1000 persons in 1993-94 to 48, but itbounced back to 108 through the period 2011-12. A similar situation waswitnessed at the all India level during these periods. The declining trend hastriggered interest among policy makers in New Delhi and academic researchersacross the country because it is affecting the economy from both demand andsupply sides.

   

In the discourse on FLFPR, social factors such as maritalresponsibilities, social stigma, and employer’s negative attitude towardsfemale employment are unanimously held as major impediments to women’s economicparticipation. However, over the last few decades, social factors might nothave become less strict, but they have not become stricter either. Therefore,while we may argue that the low level of the FLFPR in India is due to socialfactors, we cannot hold them solely responsible for its sustained decline overthe past few decades.

In the recent years, economists have advanced two morereasons to explain the trend. First, it is found that there is a negative incomeeffect of male earnings on FLFPR. In other words, as the income of a husbandgoes up, the chances of his wife pulling herself out of the labour market alsoincrease, thereby causing a fall in the FLFPR. Second, it is argued that therise in the enrolment of females in higher education delays their entrance inthe labour force, thereby reducing the FLFPR. These two explanations may soundtheoretically plausible, but they are not consistent with the experiences ofthe developed economies.  Then what may explainthe decline in women’s willingness to work in J&K or at all India level?

To seek the answer to the question, we must investigate itin the backdrop of the changing nature of the job market across Indian states.In the post-reform period, the industrial labour market has seen a sharp risein informal jobs even in the formal sector. The share of regular jobs in theformal industrial sector has gone down from 87 per cent in 1993 to below 65 percent in 2011, and it continues to be on the downward spiral. The rising trendin the use of informal employment has affected real wages of workers. Accordingto the ‘State of Working in India Report’ published in 2018, the gap betweenwages and labour productivity has widened over the past few decades. The findingis indicative of a rampant unfair exploitation of the working class. Besides,Indian states are increasingly pushing for pro-employer labour marketflexibility by amending the pro-worker provisions in their labour law regimes.Labour unions and some economists have argued that the deregulation of labouris tilting the bargaining-equation in favour of producers, leaving workers atthe mercy of their employers.

A report recently published by Oxfam India stresses that thelack of quality of jobs and the increasing wage disparity are the keyimpediments to gender equality in Indian labour market. The Report also drawsattention to the rising informalization of employment and wage discriminationagainst non-regular workers, especially in the formal sector. As per the AnnualSurveys of Industries (ASI), the share of contract workers in total workforcein the formal sector has increased from 13 per cent in 1993-94 to over 35 percent in 2011-12. As non-regular workers are excluded from most of the labourlaws, they face discrimination on several fronts including wages, workingconditions, and career advancement.

Amidst the rising trend towards unregulated job market andnon-standard forms of employment, women are more vulnerable as compared totheir male counterparts. According to the Global Wage Report, published by theInternational Labour Organization (ILO) in 2018-19, women in India are paid 34per cent less than that of their male counterparts. This gender wage gap ishighest among the 73 countries studied in the report.

To encourage women’s participation in the labour market, theCentral government in 2017 has implemented an amendment in the MaternityBenefits Act (MBA), 1961, thereby increasing the paid maternity leave to 26weeks from 12 weeks. The Act is applicable to Jammu and Kashmir also. However,it applies to the formal sector only, i.e. organisations employing more thannine workers. Given that 95 per cent of the female workforce is engaged ininformal sector, the benefit of the Act is restricted to a small percentage ofthe female workforce.  Thus, anypro-worker change in the labour law regime is unlikely to make a major dent inthe problem unless accompanied by a push towards formalization of the businessorganization.

It is pertinent to mention that since the Maternity Benefits(Amendment) Act, 2017 creates an additional financial cost of hiring a woman,employers in the private sector may choose to replace female workers by maleworkers. Considering such a possibility, the central labour ministry hasrecently proposed to bear the employer’s financial burden of seven days of paidmaternity leave – a welcome move. Two things remain to be seen in this respect.First, whether the labour ministry’s proposal translates into action. Second,whether the cost sharing proves to be optimal enough to discourage the possibleloss of women employment in private sectors in the wake of the amendment.

The central and the state government must set up a long-termconcerted action plan to induce small enterprises to expand their size ofemployment and enter in the formal sector. Besides, it is high time that thegovernment aims at enhancing job quality and ensuring equal pay for equal work.This approach will not only propel growth in women’s economic participation,but also increase their productivity.

Dr Irfan Ahmad Sofi works as Assistant Professor atDepartment of Economics, BGSBU, Rajouri and Dr Jaya Shrivastava works asAssistant Professor, Department of HSS, NIT Srinagar

Leave a Reply

Your email address will not be published. Required fields are marked *

7 + 17 =