Female Labour Force Participation Rate and Its Determinants in Post-Liberalization India

Abstract

The under participation of women in the labour force in the post-liberalisation period constitutes some of the most puzzling and debated paradoxes in development economics of India. Although India’s economic growth, increasing education levels among women and declining fertility rate are strong indicators, there has been a steady and significant reduction in the participation of women in the labour market since the 1990s. In this paper the trends in FLFPR in the rural and urban sectors have been studied against the background of the National Sample Survey Organisation (NSSO) data and Periodic Labour Force Survey (PLFS) data between 1993-94 and the current period. It identifies and discusses factors that play crucial roles in shaping FLFPR such as education, household income, fertility, social norms, urbanisation and policy interventions by the government. Using a review-based framework of analysis with two theoretical concepts of the Goldin U-shaped curve and the income effect theorem, it concludes that explanation of the drop in FLFPR should not be limited to one phenomena but should be based on many factors, acting together. Policy recommendations for turning the tide and encouraging inclusive economic growth based on an increased women's participation in the Indian labour force industry are included at the end of the paper.