Study Shows A Rise Of Self-Employed Women In India's Labour Force

A recent increase in female participation in India's workforce has been primarily driven by self-employment, likely a response to economic distress rather than economic growth, according to a study released on September 20.

Report Details

According to the "State of Working 2023" report from Azim Premji University in Bengaluru, there was a 14-percentage-point increase in women engaging in self-employment, reaching nearly 65% between the quarter ending in June 2018 and the quarter ending in December 2022.

The report also highlighted that the reasons behind this rise in self-employment among women were crucial. It pointed out that if this increase was a result of economic growth and greater labour demand, it would have different consequences compared to a situation where it resulted from declining household incomes, pushing women into self-employment.

While more women transitioned into self-employment, the earnings in this type of work were only 85% of what they were in the quarter ending in June 2019.

India's female labour force participation increased to just under 33% after the COVID-19 pandemic, up from 30% before the pandemic, but it remains relatively low. The gender wage gap, although narrower than in the early 2000s, still persists, with women earning 76% of what men do as of 2021-22.

What Does The Government Say?

The government led by Narendra Modi has proposed reserving one-third of the seats in the lower house of parliament and state assemblies for women.

Despite being popular among voters ahead of the scheduled national elections in May 2024, Modi has faced criticism for not creating enough jobs, despite India's economy being one of the fastest-growing globally. Government data analyzed by the university indicated that while the economy added nearly 57 million jobs in the five years leading up to June 2022, 35 million people remained unemployed.

Further Details

Additionally, the research found that India's growth has been less labour-intensive compared to the average in developing countries. The report stated, "Over the long run, growth in gross domestic product (GDP) and employment growth have been uncorrelated in India, suggesting that policies aimed at achieving faster GDP growth will not necessarily accelerate job creation."

Youth unemployment is particularly high, with the unemployment rate for graduates in the under-25 age group reaching as high as 42.3% as of June 2022, according to the report. However, the unemployment rate decreases as graduates get older, dropping to 22.8% for the 25-29 age group and to 9.8% for the 30-34 age group. The report emphasized the importance of considering the nature of the jobs graduates find and whether they align with their skills and aspirations.

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