A Segmentation-based Determination of Factors Influencing Women's Labor Force Participation.

AuthorInamdar, Nirad

Introduction & Literature Review

Internationally, women's labor force participation (LFP) has received a lot of research attention, especially in developed countries. Killingsworth & Heckman(1986) and Schultz (1990) were two early papers in this regard, which noted the trends in female labor supply largely in the developed world. Moghadam(1999) added a new dimension of the impact of globalization at the turn of the millennium. Recently, Cooke (2010) further localized this topic by focusing on a comparative study of 4 Asian countries--China, India, Japan and South Korea.

But, in the Indian context, this topic had not received enough attention until recently. Of late, with successive governments steadily pushing towards improving employment opportunities and workforce participation, academicians have also started focusing on these areas. Here, the main challenge is to understand the Indian context independently of the scenarios of other countries (especially developed ones). As Dunlop & Velkoff (1999) suggest, "India is a multifaceted society where no generalization could apply to all of the nation's various regional, religious, social, and economic groups. Nevertheless, certain broad circumstances in which Indian women live affect the ways they participate in the economy." Since the participation of citizens in economic activities is a vital macroeconomic indicator, research in this area has been gaining ground in India.

This paper extends the work of previous papers in two ways. While a majority of earlier studies are at an aggregated country level, this paper studies one particular state viz. Maharashtra. Another feature is that instead of a general study on the female and male genders together, we narrow the scope to one gender. We recognize a need to study the LFP of women separately for 2 important reasons. Firstly, women constitute nearly one half of the potential labor force, so an improvement in this statistic will significantly improve the economic output. Secondly, the factors which affect women's LFP are different from those for men. They are not only economic, but also socio-cultural. Although the traditional gender-based division of roles has ceased to exist in Western Europe, North America and such developed nations, it persists across most of Asia and Africa. For this reason, LFP is also correlated to gender equality. In a society with a high degree of gender equality, women have the encouragement to seek economic opportunities and thus, the LFP is high. Conversely, one can argue that a high LFP indicates a society with high gender equality. Yadav (2014) notes that "UNIFEM (the United Nations Development Fund for Women) considers that women's economic empowerment is essential for poverty alleviation and defines this as having access to and control over the means to make a living on a sustainable and long term basis." This makes the study of work participation of women a more complex matter than is often recognized.

The stark difference between women and men in India is apparent in the distribution of their usual principal status. As per the data of the 68th round of NSSO, in the age group of 15-64 (which represents potential earners), 22% women were employed and nearly 77% women were out of the labor force. On the other hand, among men in the same age group, almost 78% were employed and less than 20% were out of the labor force. It suggests that for males, the primary concern is about finding gainful employment, while for women, it is about being available for gainful employment in the first place. Hence, our approach should be to treat these two aspects differently.

The motivation of this paper is to understand the key factors which influence women's LFPin one state and to find their relative importance. Also, we want to compare the results with those which have come through similar studies. Hence, the paper begins with a review of relevant literature on the economic activities of women.

Srivastava & Srivastava (2010) notes the key difference between the participation of women and men. Whereas only economic reasons matter in the case of men, other factors such as proximity of the workplace, flexible hours are likely to be important driving forces in the case of women. Chakrabarti (1977) mentions a number of other factors, like inability of women to adapt themselves to quick economic transformation and low level of educational attainment. There was a puzzling decline in women's LFP in India after 2004-2005. Neff, Sen & Kling (2012) attempts to explain this using four standard explanations: that more women in rural areas are now pursuing higher education and are therefore not available for work (education effect), that household incomes are rising quickly enough that there is a tendency for women to withdraw from the labor force to attend to domestic duties (income effect), that employment opportunities for women are decreasing, and that social and cultural factors may be interacting with these three factors. Dutta et al (2012) gives a critique of India's Employment Guarantee Scheme (EGS) as to why, contrary to expectations, it has not resulted in a sustained increase in women's LFP. Taking this ahead, Verick (2016) notes that a significant proportion of women usually engaged in domestic duties reported their willingness to accept work if the work was made available at their household premises. Similarly, Chevalier & Viitanen (2002) establishes a causality between women's LFP and the availability of childcare. One can argue that if it is applicable in developed countries, it is even more applicable in South Asia and especially in India, where the fertility rate is higher.

Beneria (1979) elaborates that the focal point of women's economic activities is their special role in the reproduction of labor force, thus establishing causality from reproduction to production. Lim (2004) probes this viewpoint further. It examines the elusive or ambiguous relationship between fertility and women's labor force participation in those developing countries with intermediate levels of fertility. Cooke (2010) compares four major Asian economies: China, India, Japan and South Korea. While all these countries share considerable similarities in terms of social and cultural value, the paper singles India out as being different from the rest from an economic outlook. China, Japan and South Korea all follow an export-oriented economy, especially in large-scale manufacturing industries, which is naturally conducive to women's employment. On the other hand, our economy relies more on domestic demand, which is one of the reasons for the decline in women's LFP in both, the organized and unorganized sectors. Ghosh & Roy (1997) also agrees with this point. In terms of widening the scope of coverage, one of the comprehensive papers is from Besamusca et al (2015), spanning 117 countries. It investigates the effects of economic conditions, families, education, and gender ideologies in eleven age groups. It finds that women are more likely to participate when paid maternity leave schemes...

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