Study reveals surge in Indian women's self-employment

22 Sep 2023 CW Team

A recent study, released by the Bangalore-based Azim Premji University in their report "State of Working 2023," has highlighted a notable increase in women's involvement in India's labor force. This upturn has been primarily driven by self-employment, which appears to be influenced more by economic distress than overall economic growth.

Between the quarter ending in June 2018 and the quarter ending in December 2022, the percentage of women engaged in self-employment surged by 14 points, reaching nearly 65%. The report underscored the importance of understanding the underlying reasons for this increase, noting that if women's participation in the workforce rises due to economic growth and heightened labour demand, it has different implications than if it rises due to declining household incomes, compelling women into self-employment.

Despite this increase in self-employment among women, the earnings from such endeavours remained at only 85% of their levels from the quarter ending in June 2019. India's female labour force participation, while improving to just under 33% following the Covid pandemic from 30% earlier, continues to be low. Furthermore, the wage gap, while narrower compared to the early 2000s, still persists, with women earning only 76% of what men do as of 2021-22.

In response to these challenges, the government led by Narendra Modi has proposed reserving a third of the seats in the lower house of parliament and state assemblies for women.

Despite India's rapid economic growth, which has contributed to Modi's popularity ahead of the scheduled national elections in May 2024, criticism persists regarding the government's failure to generate sufficient employment opportunities. While the economy added almost 57 million jobs in the five years leading up to June 2022, expanding India's workforce to 493 million, approximately 35 million people remained unemployed, as indicated by government data analysed by the university.

The university's research also revealed that India's growth has been less labour-intensive compared to the average in developing countries. The report emphasised that over the long term, economic growth (GDP) and employment growth have exhibited no strong correlation in India, suggesting that policies aimed solely at achieving faster GDP growth may not necessarily accelerate job creation.

Unemployment rates, especially among the youth, are notably high, with the unemployment rate for graduates in the under-25 age group reaching as high as 42.3% as of June 2022, according to the report. However, this rate decreases with increasing age, dropping to 22.8% for the 25-29 age group and further to 9.8% for the 30-34 age group. The report underscored the need to examine the nature of jobs available to graduates and whether they align with their skills and aspirations.

A recent study, released by the Bangalore-based Azim Premji University in their report State of Working 2023, has highlighted a notable increase in women's involvement in India's labor force. This upturn has been primarily driven by self-employment, which appears to be influenced more by economic distress than overall economic growth. Between the quarter ending in June 2018 and the quarter ending in December 2022, the percentage of women engaged in self-employment surged by 14 points, reaching nearly 65%. The report underscored the importance of understanding the underlying reasons for this increase, noting that if women's participation in the workforce rises due to economic growth and heightened labour demand, it has different implications than if it rises due to declining household incomes, compelling women into self-employment. Despite this increase in self-employment among women, the earnings from such endeavours remained at only 85% of their levels from the quarter ending in June 2019. India's female labour force participation, while improving to just under 33% following the Covid pandemic from 30% earlier, continues to be low. Furthermore, the wage gap, while narrower compared to the early 2000s, still persists, with women earning only 76% of what men do as of 2021-22. In response to these challenges, the government led by Narendra Modi has proposed reserving a third of the seats in the lower house of parliament and state assemblies for women. Despite India's rapid economic growth, which has contributed to Modi's popularity ahead of the scheduled national elections in May 2024, criticism persists regarding the government's failure to generate sufficient employment opportunities. While the economy added almost 57 million jobs in the five years leading up to June 2022, expanding India's workforce to 493 million, approximately 35 million people remained unemployed, as indicated by government data analysed by the university. The university's research also revealed that India's growth has been less labour-intensive compared to the average in developing countries. The report emphasised that over the long term, economic growth (GDP) and employment growth have exhibited no strong correlation in India, suggesting that policies aimed solely at achieving faster GDP growth may not necessarily accelerate job creation. Unemployment rates, especially among the youth, are notably high, with the unemployment rate for graduates in the under-25 age group reaching as high as 42.3% as of June 2022, according to the report. However, this rate decreases with increasing age, dropping to 22.8% for the 25-29 age group and further to 9.8% for the 30-34 age group. The report underscored the need to examine the nature of jobs available to graduates and whether they align with their skills and aspirations.