The Puzzling Decline in Rural Women’s Labour Force Participation in India: A Re-Examination

Abstract

There has been a sharp fall in female labour force participation (LFP) in rural India between 2004-05 and 2009-2010. Why has this occurred? We look at the four standard explanations put forward for the decline – that more women in rural areas are now pursuing higher education and are therefore not available for work (the education effect), that household incomes are rising fast enough so that there is a tendency of women to withdraw from the labour force to attend domestic duties (the income effect), that employment opportunities for women are decreasing and that social and cultural factors may be interacting with other factors to amplify the effects of these factors on the latter. In this paper, we re-examine these explanations by a systematic exploratory descriptive analysis of the 61st and recent 66th round NSS Employment-Unemployment Survey data. Our findings suggest that the decline in rural women’s LFP could potentially be due to an income effect and partly due to an education effect. We neither find evidence for changes in employment opportunities nor for social and cultural interaction effects explaining the decline in rural female LFP.

Keywords: female labour force participation, gender, income effect, India

JEL Classification: J16, J21, 013