In
a country like India, where our finance minister, Nirmala Sitharaman, is a
woman, is it right to say that women are missing in the Indian economy? Of
course, it is, and here are the reasons.
According
to the World Bank, the global labor force participation rate for women is just
50% compared to 80% for men. Women are less likely to work in formal employment
and have fewer opportunities for business expansion or career progression due
to family responsibilities. Even if women work, they earn less than men. When
women reach their mid-30s and 40s, it is found that their earnings dip compared
to men in the same position and profession. Women are not involved in paying
jobs as much as men are, and the labor force participation rate gives an idea
about this.
If
India has the largest population in the world, then why are women missing in
the workforce? India is a developing country, Indian households are not rich
enough to comfortably subsist on one income; the country’s
per capita GDP is less than $2,400, just one-fifth of the world average.
Is it because women lack access to education? In India, educated women are less
likely to find employment. College enrollment has soared since the turn of the
century, yet women’s participation in the workforce has been on a steady
decline until very recently. One of the reasons why women don’t participate in
the workforce is because 99% of Indian women eventually get married, and women
are expected to do nearly all of the housework, for which they are not paid.
Only 6% of men report doing any cooking, and 8% do at least some cleaning. More
women spent time cooking and cleaning resulting in less time for paid labor.
This is one of the main reasons we see women doing part-time work rather than a
full-time job. In 73 countries (based on 2018 data), women outnumber men in
part-time work. A World Bank report says, “Women earn 77 cents for every dollar
a man earns.” The International Labor Organization terms gender pay as a
measurable indicator of inequality between women and men. Now the question is,
is this situation the same among all developing economies? The answer is no. If
we take a look at Bangladesh, there are a lot of similarities between India and
Bangladesh, but women's workforce participation in Bangladesh is much higher
than in India. This is because of the relationship between women’s work and
GDP. It is generally called the U-shaped relationship between female labor
force participation and GDP per capita. Levels of female labor force
participation are high for the poorest countries generally, where agriculture
is the dominant sector and women often participate in small-holder agriculture
work, such as Bangladesh. Women’s participation in the workforce is lower in
middle-income countries, which have much smaller shares in agriculture, such as
India. Finally, among high-income countries, female labor force participation
is again higher, accompanied by a shift towards a service sector-based economy
and higher education levels among women, such as in the USA. India as a country
is stuck at the bottom of this U curve. Dr. Alice Evans of Kings College London
calls the “Patrilineal Trap,” that is, wages are barely high enough that
families can scrape by on one income but not high enough to draw women back to
the workplace. From the above discussion, we can see that women are trapped
between low wages and suffocating social norms. They do go to college and want
to work, but society pulls them back. Today, India is the 5th largest economy
with 6% growth, yet this growth has failed to create jobs. Economists call the
number of new jobs produced for every 1% change in GDP "the “elasticity of
labor." It is reported that between 2011 and 2019, the Indian labor force
grew by 0.26%, imputing an elasticity of 0.04, which means virtually zero jobs
were created over 10 years. This results in fierce competition for every last
paid job.
The
East Asian Model is about a rapid progression from agriculture to manufacturing
to services in this order. It worked for Taiwan, Hong Kong, Singapore, South
Korea, and China. India, on the other hand, missed this memo. India jumped from
agriculture to services, skipping manufacturing, as it was difficult for India,
after liberalization in the 1990s, to compete with Chinese factories. As Indian
farmers have been on a steady decline, usually it is expected that all these
farmers will become factory workers, which is one labor-intensive industry
replaced with another. But in India, manufacturing hasn’t absorbed these
displaced farmers hence, we often see Indians working as construction laborers. But what about women? In East Asia, where manufacturing replaced agriculture,
women became factory workers, which slowly influenced social expectations and
afforded them newfound freedom. Whereas in India, women were pushed out of
farming but discouraged from taking construction. A few lucky women secured
lucrative service jobs. But the vast majority simply left the labor market
altogether. This is one of the reasons why women in Bangladesh work at much
higher rates, as many factories provide them with a socially accepted place to
do so, whereas India has no such scale. By merely employing women at the same
rates as men, according to Bloomberg, India’s economy could grow by nearly a
third by 2050.
The
World Economic Forum releases the Global Gender Gap Index annually, which
benchmarks the current state and evolution of gender parity across four key
dimensions: economic participation and opportunity, educational attainment,
health and survival, and political empowerment. This index ranked India at 127
out of 146 countries in 2023. India’s score stands at 68.4%, indicating a
modest improvement of 0.3% points compared to the previous year. According to
the report, India’s progress in economic participation and opportunity remains
a challenge, with only 36.7% gender parity achieved in this domain. The report
also mentions that there is a slight drop in the representation of women in
senior positions and technical roles. India has improved by 1.4 percentage
points and eight positions since the last edition. But it will take many more
years to achieve full gender parity.
Things are changing, though at a slow pace but the increasing presence of women as entrepreneurs has led to significant business and economic growth in the country. Women entrepreneurs such as Namita Thapar-executive director of Emcure Pharmaceuticals, Vineeta Singh-CEO and co-founder of Sugar Cosmetics, Ghazal Alagh- CEO and co-founder of Mamaearth, Radhika Gupta- CEO of Edelweiss Asset Management and the list goes on, they all have inspired millions of people. Women-owned business enterprises are playing a prominent role in society by generating employment opportunities in the country, bringing in demographic shifts, and inspiring the next generation of women founders. Women's participation in the labor force is not only a matter of gender equality but also essential for economic growth and development.
- Savani Mane
