A Dynamic Analysis of Women’s Labour Force Participation in Urban India

Abstract

The introduction of the Periodic Labour Force Survey (PLFS) heralded a methodological innovation for the study of Indian labour, allowing the researcher to build panels tracking urban individuals over a year. Using two rounds of the PLFS covering the periods 2017–18 and 2018–19, we construct a pooled panel of urban Indian individuals aged 15–65 and focus on women’s experiences in the labour force. We find evidence of low dynamism in the Indian economy, with women facing significant difficulties regarding labour force participation. While a majority of women remain outside the labour force throughout the year, those who do participate face significant disadvantages. Job-finding rates for women are half that of men, indicating weak demand for women’s labour in the economy. Women face significant exits from both employment and unemployment, with nearly 18% of employed women leaving their jobs and moving to non-participation over the year. Women’s relative disadvantages persist even when age and education are considered, with the lowest job-finding rates seen for young and graduate women, and rates of labour force exit much higher than that of men. This paper highlights the importance of looking at demand side questions when it comes to examining women’s labour force participation.

JEL Codes: J21, J69