India’s Gender Gap Ranking Drops, but Female Participation Continues to Rise

India’s Gender Gap: The Global Gender Gap report got released this week and India has slipped two places to 129 in the global ranking. The two aspects India has done worse in are educational attainment and political empowerment. India has done slightly better in economic opportunity and participation. In other news recently, the latest quarterly data from the Periodic Labor Force Survey (PLFS) has shown that the labor force participation (LFP) for females in urban areas has increased by 0.6 percentage points in the January-March quarter of 2024 as compared to the previous quarter. In fact, going back further on this data reveals that the LFP of females has consistently increased for the last 11 quarters.

Analyzing the New Female Workers
Before we celebrate the increased labour force participation, it is important to see who are these women who are working and where are they working. A closer look at the PLFS over the past 6 years (since the survey started) reveals that the fastest growing category of workers among females in urban areas is the own account category, with a CAGR of 7.5%, significantly higher than the growth in salaried work at 4.5%.

The Rise of Gig Economy Workers
Own account workers are those people who work for their own profit or run their own business, with little or no help from any other person. In the traditional sense, these workers include your street food vendors, insurance agents, standalone tailors and so on. Today, these aspiring entrepreneurs also find work in the gig economies. Gig economies can range from a cab driver you book from a ride hailing app, the plumber you get through the aggregation platforms, the coder who is brought in by our tech giants to complete a specific “gig” and the consultants, who swoop in to solve a particular challenge your firm is facing and leave once the task is done. At the professional services end of this spectrum, you see many highly skilled workers who are choosing “gigs” to regular employment for the freedom to choose what they work on, the flexible hours, etc. But on the other end of the spectrum there is also the informalization of the workforce, since your cab driver is an independent contractor and not a permanent employee and firms are cutting costs by employing in this format, making the worker more vulnerable to economic shocks.

Educational Disparities in Gig Work
So our new female gig workers are from which side of the spectrum? Looking at the education level of the women working, we find that the lion’s share (84%) of increased participation in own account work is coming from women that do not have a college degree. This is in contrast to salaried work, where the net addition of jobs is slower but the largest increase (52%) is coming from women with college degrees or above. On the surface this doesn’t look alarming as women in urban India might be finding work in areas where their skill levels match with the job requirements. However, given the informal nature of jobs in the ‘gig’ economies for less educated women, it is likely that females in the own account category are doing the ‘gig’ work because they are not able to find salaried work. This is a concern since this indicates that the new additions may be happening due to financial distress, and they are likely to quit when the financial distress reduces.

High Unemployment Among Educated Women
This story presents a glass half full scenario. It seems less educated women might not be getting the jobs they desire, but at least urban India is creating jobs for highly educated women. Surprisingly, this also seems unlikely. In fact, the majority of women unemployed in urban areas are those with a college degree and above. In 2022-23, highly educated women made 82% of total unemployed women, an increase from 70% when the PLFS was started. As per the latest annual round of the PLFS, 61% of the highly educated women in urban India are choosing to stay out of the labor force. So, what are women doing, if not working? The data shows the majority of urban women (55%) above the age of 15 are still spending their time in domestic chores, even more so than rural women (42%) in India. For those with a college degree and above, slightly more than a third are still engaged in domestic duties and are not fully utilizing their economic potential.

Barriers to Workforce Participation in Urban Areas
So most of the women in urban India are involved in care responsibilities and are choosing to stay out of the workforce, even the more educated ones, who face less economic hardship. But why is it so, and more so in urban India? The answer is straightforward, if one pays attention, it is the lack of care facilities that is keeping the urban woman from work. Unlike in rural areas, where there is literally a village to take care of the young, in urban India the woman of the household toils alone. Add to it the fact that in urban areas there are more nuclear families (since the whole clan cannot migrate) and lack of support from extended families (who are still in the rural parts) and lack of communities in urban areas, we realize that the challenges of childcare are severe in urban areas, especially in poorer and migrant communities. This is compounded by the fact that men do not still do household chores in India. All of this together we have a situation where even the most educated women in urban areas are unable to work.

Need for Policy Action
Therefore, the challenge is two-fold: first is to create an enabling environment to get women to join the workforce, and the second is to create opportunities for them to work once they join the workforce. Therefore, there is a need for policymakers to be conscious of both these aspects; otherwise, the efforts made to increase labor force participation will be unsuccessful if women can’t find work other than “gig” work and are discouraged to even join the workforce, or if there is no apparatus to support them with childcare facilities to reduce their burden of care responsibilities.

(This article written by: Shabana Mitra and Havishaye Puri)