Growing Economy and Declining Female Employment: An Indian Paradox

Esha Chatterjee, University of Maryland

Inspite of the rapid economic growth in India, data from the 68th round of the National Sample Survey shows a large decline in women’s labor force participation rate (LFPR) in India. Women's LFPR declined from around 28.7% in 2005 to 22.5% in 2012. The India Human Development Survey (IHDS) data (conducted across two waves, one in 2004-2005 and the other in 2011-2012) in conformity with the NSS data shows a decline in women’s LFPR over time (from 31.12% in 2005 to 24.77% in 2012). The present paper uses data from the two waves of the IHDS in order to explain the decline in women's LFPR. Standard decomposition analysis is used to decompose the change in women’s labor force participation to: (a) changes due to rising income; (b) changes due to rising education; (c) changes attributable to the changing relationship (if any) between education and labor force participation.