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A normalisation of WFH is unlikely to raise women’s participation in the labour force

Context:

A recent report from LinkedIn suggested that Indian women increased their participation in paid work between April and July because the new normal of “work from home” (WFH) allowed them to combine their domestic and employment responsibilities.

Relevance:

GS Paper 1: Role of women and women’s organisation;

GS Paper 3:  Indian Economy (issues re: planning, mobilisation of resources, growth, development, employment);

Mains questions

  1. Work from home, without lessening domestic burden and an increase in paid work, is unlikely to draw more women into the labour force. Discuss. 15 marks

Dimensions of the article

  • What is labour force?
  • Status of employment in India.
  • Formalisation of jobs
  • Gender dimensions of employment
  • Steps taken by the governments
  • Way forward

What is labour force?

Labour force refers to those who are either engaged in any economic activities or are willing to pursue an economic activity in a reference period. It includes both (i) those who are in workforce; and (ii) unemployed.

Workforce refers to the population who are actively engaged in any economic activities and producing goods and services in a reference period while unemployed refers to all those who are seeking and available for work but had not worked in a reference year due to lack of work.

Labour force participation rate (LFPR) can be defined as the proportion of population in the labour force to the total population.

Worker population ratio (WPR) can be defined as the proportion of employed persons to the total population.

Status of employment in India

As per Periodic Labour Force Survey estimates, between 2011-12 and 2017-18:

  • The share of regular wage/salaried employees has increased by 5 % points in rural and urban areas. Under it, the proportion of women workers have increased by 8 % points.
  • In absolute terms, there was a significant jump of around 2.62 crore new jobs in the above category with 1.21 crore in rural areas and 1.39 crore in urban areas with addition of 0.71 crore new jobs for female workers.
  • Among the self-employed category (consists of employers, own account workers and unpaid family labour), while the proportion of own account workers and employers increased, the proportion of unpaid family labour (helper) has declined, especially for females. The proportion of total self-employed workers however remained unchanged at 52 per cent.
  • The distribution of workers in casual labour category decreased by 5% in rural areas.
See the source image

Formalisation of jobs

Formalisation of labour is critical to ensure wage and social protection for some 39 crore informal workers in the country, and the sectors that can trigger a shift towards the formalisation include the medium, small and micro enterprises (MSMEs), manufacturing, construction, goods and transport. According to Economic Survey 2019-20, the formalization of jobs in India has increased.

  • It was observed that the proportion of workers in organized sector increased from 17.3 per cent in 2011- 12 to 19.2 per cent in 2017-18 with total 9.05 crore workers in the organized sector.
  • Total formal employment in the economy also increased from 8 per cent in 2011- 12 to 9.98 per cent in 2017-18 with total 4.7 crore workers in formal employment in 2017-18.

Gender Dimension of Employment

Gender equality in labour market is considered to be smart economics to achieve faster economic growth and wealth creation. In an era of globalization, no country can develop and achieve its full potential if half of its population is locked in non-remunerative, less productive and non-economic activities. However,

  • According to NSO-EUS and PLFS estimates, female labour force participation rate (LFPR) for productive age-group (15- 59 years) declined by 7.8 % from 33.1 % in 2011-12 to 25.3 % in 2017-18 and rate of decline is sharper in rural areas as compared to urban areas. As a result of this, gender disparity in India’s labour market has increased.
  • Female Worker Population Ratio (WPR) also declined to 23.8 % in 2017-18 as compared to 32.3 % in 2011-12.

Factors Influencing Female Labour Force Participation

The arguments advanced in support of the declining and low female LFPR are from both supply and demand side.

On the supply side:

  • More women in rural areas are now pursuing higher education has delayed their entry into the labour market.
  • The household incomes have risen in rural areas on account of higher wage levels.
  • Cultural factors, social constraints and patriarchal norms restricting mobility and freedom of women.
  • Relatively higher responsibilities of unpaid work and unpaid care work . About 60 per cent of working age females are attending to domestic duties only and this proportion has increased over the last two decades.

On the demand side:

  • Absence of job opportunities and quality jobs and significant gender wage gap.
  • Lack of attainment of appropriate education level/skill set.
  • A fall in international demand for products of labour-intensive industries in urban areas.
  • Low female wages in agriculture sector
  • The fall in employment in agriculture has not shown concomitant increase in opportunities for women in the manufacturing sector where most women with middle to secondary levels of education and from middle income groups are likely to look for employment.
  • Structural shift away from agricultural employment, and increased mechanization of agriculture along with decline in animal husbandry in rural areas.
  • Withdrawal of men from agriculture and shift to the construction sector in urban areas, led to loss of jobs for rural women who were engaged as unpaid labour along with the men.

Steps taken by the government

Various steps are being taken for generating employment in the country like encouraging private sector of economy, fast-tracking various projects involving substantial investment and increasing public expenditure on schemes such as

  • Prime Minister’s Employment Generation Programme (PMEGP).
  • Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
  • Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY).
  • Deendayal Antodaya Yojana-National Urban Livelihoods Mission (DAY-NULM).

Steps Taken Towards Formalisation of the Labour Market:

  • EPFO launched a “Universal Account Number” service for portability of Provident Fund accounts,
  • The Code on Wages Act, 2019 to ensure minimum wages to all and timely payment of wages to all employees irrespective of the sector of employment without any wage ceiling, except MGNREGA. 
  • MUDRA and STAND-UP India for creating formal credit to businesses.
  • Mandatory wage ceiling of subscription to EPS increased from Rs 6,500 to Rs 15,000 per month and Rate of ESI contribution reduced from 6.5 per cent to 4 per cent.
  • National Career Service (NCS) Project launched in 2015, provides a host of career-related services such as dynamic job matching, career counselling, job notifications and information on skill development courses and rich career content on a digital platform.

Initiatives to Improve Female Work Participation:

  • Safety of Women at Workplace: The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 covers all women, irrespective of their age or employment status and protects them against sexual harassment at all workplaces both in public and private sector, whether organized or unorganized.
  • Mahila Shakti Kendra Scheme to empower rural women through community participation.
  • Female Entrepreneurship: To promote female entrepreneurship, the Government has initiated schemes like: MUDRA, Stand Up India and Mahila e-Haat.
  • Pradhan Mantri Mudra Yojana (PMMY) provides access to institutional finance to micro/small business units upto Rs 10 lakh.

Way forward

Considering India’s demographic advantage of a large young population in the productive age group, improvements in the social sectors like education, health care, water supply and sanitation leaves a profound impact on the quality of life of the people as well as productivity of the economy. India’s march towards achieving SDGs is firmly anchored in investing in human capital and inclusive growth.

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October 2022
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