India Employment Report 2024

India Employment Report 2024

Subject: Economy

Section: Unemployment and Inflation

Highlights:

• Key labor market indicators have shown improvement recently.
• Labour Force Participation Rate (LFPR), Workforce Participation Rate (WPR), and Unemployment Rate (UR) deteriorated between 2000 and 2019 but improved thereafter.

Women’s Participation:

• Female LFPR is significantly lower compared to male counterparts.
• In 2023, male LFPR was 78.5, while female LFPR was 37.
• World female LFPR rate is 49.
• Female LFPR declined since 2000, reaching 24.5 in 2019, before a slight increase.
• Increase in labor force participation, especially in rural areas, mostly in self-employment (often unpaid).

Reasons for Low Women’s Participation:

• Barriers include lack of jobs, caregiving duties at home, low wages, patriarchal mindsets, and safety concerns.
• Economist Jayati Ghosh notes women squeezed out of employment due to scarcity of paid work.
• Prof. Basole cites reasons on supply and demand side:
• India’s growth pattern not job-intensive.
• Social norms limit women’s mobility and make them primary caregivers.
• Concerns over public safety and lack of transport confine job options.

Insights from Economics Nobel Laureate Claudia Goldin:

• Factors influencing supply and demand for female labor include:
• Opportunities for combining paid work and family.
• Decisions related to education and childrearing.
• Technical innovations, laws, and norms.
• Structural transformation of the economy.
• Women’s choices often limited by marriage and responsibilities for home and family.

Needed Changes:

• Interventions required on both demand and supply sides of the labor market.
• Prof. Basole suggests policies promoting labor-intensive sectors, public investment in safety, transport, and affordable child and elderly care.
• These interventions can enable women to work outside the home and access better-paying opportunities.

Improving women’s participation in the labor force involves addressing various barriers such as societal norms, safety concerns, lack of job opportunities, and caregiving responsibilities. Effective policies and interventions are needed to create an environment where women can work outside the home and access better-paying opportunities.

Goldin’s U-Curve

The Goldin’s U-Curve, named after Claudia Goldin, an American economist, refers to a theory that suggests how the gender wage gap changes over the course of a woman’s career.

This theory is often used to explain the phenomenon where the wage gap between men and women widens during the early and middle stages of a woman’s career and then narrows again as she reaches higher levels of seniority.

1. Early Career:
   • At the beginning of a woman’s career, the wage gap between men and women tends to be smaller. This is because women and men often have similar education levels and job roles at this stage.
   • Factors such as education, skills, and experience are more comparable among individuals starting out in their careers, leading to a smaller observed wage gap.
2. Mid-Career:
   • As individuals progress in their careers, differences in career interruptions and work-life balance choices start to emerge.
   • Women may be more likely to take time off for caregiving responsibilities, such as raising children or caring for elderly relatives.
   • These interruptions can lead to slower wage growth or fewer opportunities for promotions, widening the gender wage gap during the mid-career stage.
3. Later Career:
   • As women reach higher levels of seniority in their careers, the gender wage gap tends to narrow again.
   • At this stage, women who have remained in the workforce often have more negotiating power, experience, and proven track records of success.
   • Factors such as seniority, leadership roles, and specialized skills become more important, leading to a narrowing of the wage gap.