Female Labour Force Participation in

India: A Comprehensive Perspective

Abstract
The female labour force participation rate (FLFPR) in India has remained notably low
despite substantial economic growth and rising educational attainment among women. This
paper examines the trends, determinants, and challenges associated with FLFPR in India. It
uses a combination of secondary data and empirical insights drawn from relevant literature
and the Periodic Labour Force Survey (PLFS). The analysis explores socio-economic,
demographic, and cultural influences on women's employment and highlights regional
variations. The study concludes with policy recommendations aimed at improving women's
economic inclusion through targeted interventions, awareness programs, and systemic
reforms.

1. Introduction
Labour force participation is a crucial indicator of economic development and gender
equality. The inclusion of women in the workforce not only promotes social justice but also
boosts productivity and growth. In India, however, the participation of women in economic
activities has been surprisingly low and has shown mixed trends over the years. According
to the PLFS 2022-23, the FLFPR stood at approximately 37%, reflecting an improvement
from previous years but still below global and regional averages.

The rate of Female Labour Force Participation (FLFPR) has become an increasingly serious
issue globally in labour markets. Female Labour participation is a critical area of study since
it significantly affects economic growth and gender discrimination in society. Increasing
numbers of women in the labour force, economies can grow at a faster rate in response to
greater labour inputs and enhanced use of the existing human capital. In empirical data, the
relationship between Female labour force participation and economic growth is were
established using a U-shaped hypothesis. In India, there is no definite relationship between
the female labour force participation rate and economic growth. However, the declining rate
of FLFPR has experienced a rise over the past two years thereby suggesting a potential
trend that is observed to increase in this research paper. India has from a worldwide view
a very low rate of female labour force participation.

Boserup's (1970,2007) pioneering work pre-empted that most women work in the informal
sector. There is a corresponding trend evident from the Indian framework wherein women
are working mostly in low-paid casual employment. There have been instances of tenuous
link between instruction and the female workforce. But higher education raises the status of
women and provides with the vocational training they need.

Massive joblessness in India and jobless growth in female employment sectors explain the
low FLFPR in India. The study is also investigating the impact of the such as urbanization
and gender pay gaps women labour force financial inclusion participation. India has a very
high number of women in the informal and own-account sectors. Policy-makers should
understand the influence of major variables on the female labour force participation rate.
The research explains how certain policies benefit the female labor force participation rate.
It has been has been constructed to demonstrate a U-shaped relationship in India. But the
relationship is not evident and the results are divided. The empirical research states a
negative correlation between education and FLFPR in India. Urbanization has an increasing
ambiguous effect on FLFPR in India. Social and cultural constraints play major roles in
decreasing the number of women in the employees.

This research paper seeks to explore the dynamics of female labour force participation in
India, highlighting the socio-economic and institutional barriers that women face. It also
considers the role of education, household income, cultural norms, and urban-rural divides
in shaping FLFPR outcomes.

2. Literature Review
A wide array of literature has investigated the causes and consequences of low FLFPR in
India.

Neff, Sen & Kling (2012) found that increasing household incomes often lead to a reduction
in female workforce participation, especially among married women. The phenomenon,
sometimes called the "income effect," suggests that as households become wealthier,
women's contribution to income generation is deemed less necessary.

Das et al. (2015) identified a U-shaped relationship between education and FLFPR. Women
with little to no education often engage in low-skilled informal work, while highly educated
women access professional jobs. Those with moderate education tend to drop out of the
labour force due to lack of suitable jobs. The U-shaped relation between women’s
employment and economic development has largely been debated and the finding is more
robust for cross-country (static)Comparisons (Prava Mishra Assistant Professor, n.d.). The
U-shaped Hypothesis has been defined that when incomes are very low, women work in
agriculture to support the households. As income rises along with the use of technology,
men start dominating the workforce. As development rises, the education level for men
rises and much later for women (The u-shaped female labour force function in economic
development and economic history (1), n.d.). At a household level, these structural shifts
can be described in the context of the neoclassical labour supply model: as a spouse’s wage
rises, there is a negative income effect on the supply of women’s labour. Once wages for
women start to increase, however, the substitution effect will induce them to increase their
labour supply (Verick, 2018).

Chatterjee, Murgai & Rama (2015) highlighted that cultural and social norms, particularly in
Northern India, contribute to restricting women’s mobility and employment choices.
Female work participation is often discouraged or limited to home-based and informal
work.

Empirical research also states that gender pay gaps have a significant impact on women in
the labour market. Gender - pay gaps reduce female employment, increase fertility, and
lower economic growth through participation and demographic effects (Klasen & Lamanna,
2008). In contrast, Blecker and Seguino suggest that high gender pay gaps and associated
low female wages increase the competitiveness of export-oriented industrializing
economies and thus boost the growth performance of these countries (Blecker & Seguino,
2002). Financial inclusion is another factor which has a positive impact on female labour
force participation. Having their own bank account increases women’s economic autonomy
and self-employment (Sorsa et al., 2015).

Klasen & Pieters (2015) emphasized that India’s structural shift from agriculture to services
and manufacturing has not been gender-neutral. The sectors that are expanding rapidly
have not generated sufficient employment opportunities for women.

Several theories have been developed to better understand the factors which impact
women’s choice to participate in the labour force. Human Capital Theory (HCT) considers
that female labour force participation (L) is influenced by women’s productive economic
advantage reflected by their level of education (E), their non-human capital assets (A), the
child survival rate after birth (S) and the social environment influence(T). The education of
women is generally expected to have a positive impact on labour market participation, and
at the same time reduce the number of children born to women (Thaddeus et al., 2022). The
Income leisure theory explains that higher wages increase the female labour force
participation rate. The income-leisure model examines labour supply in relation to wages
and income. The higher the wage rate, the more attractive work becomes (Psacharopoulos
& Tzannatos, 2014).

The female labour force participation rate becomes a significant area of study due to its
effect on economic growth. In particular, in the Indian case, Esteve-Volart (2004)
demonstrates that an increase of 10% in the female-to-male ratio of workers would raise
per capita net domestic product by 8% (Esteve-Volart,2004). At the household level, a
working woman has greater influence over household decisions which decreases their
dependence on men. Raising women's participation in economic activities is regarded for
several reasons; it enhances their social and economic status and thus contributing to an
overall economic efficiency increase of the nations, it reduces the gender difference in
human capital resulting in women's increased productivity in the labor force and enlarges
the share of women employment across various sectors of the economy (Thaddeus et al.,
2022). At a household level, a working woman possesses a greater influence on household
decisions that make them less dependent on men.

3. Explaining Female Labour Force Participation trends in India

In India, the female labor force participation rate is becoming a serious issue for discussion
in India. This is due of the lowest labour force participation rates for women in the world;
more accurately, one of the lowest rates for urban women (Bhalla & Kaur, n.d.). The low
female participation in the labour force indicates that India has an untapped human capital
potential which can lead to a massive increase in economic growth. Several factors like the
level of female education, the fertility rate, and gender Mobility, wage discrimination,
availability of jobs, infrastructure, financial availability and socio-economic constraints
influence the female labor force participation rate in India.

In everyday life, the rate of women engaging in economic activities is statistically under
reported. The role played by women in care activities, predominantly their reproductive
work and household maintenance, fall outside the system of national accounts in India,
whereas the international definitions include the development of commodities for personal
consumption within the production boundary of the System of National Accounts (SNA)
(Chaudhary & Verick, 2014b).
DATA FROM ANNUAL REPORT, PLFS, 2023-2024

Labour Force Participation Rate (LFPR) in usual status (ps+ss) across urban and rural
areas by gender and over three survey years (PLFS 2021-22 to 2023-24)

The analysis of Labour Force Participation Rate (LFPR) in usual status (ps+ss) across urban
and rural areas from PLFS 2021-22 to 2023-24 reveals distinct trends between genders and
geographies. Urban male LFPR has remained relatively stable, ranging between 58% to 60%
for all ages and around 74% to 76% for those aged 15 and above. In contrast, urban female
LFPR, while significantly lower, has shown a gradual increase over the years—from 18.8%
to 22.3% (all ages), and from 23.8% to 28.0% (15 years and above). Rural areas exhibit
higher overall LFPR, particularly among women. Rural female participation has seen a
notable rise, from 27.2% to 35.5% (all ages), and from 36.6% to 47.6% (15 years and
above), indicating growing economic engagement. Rural male LFPR has remained strong
and steady, exceeding 65% for all ages and surpassing 80% for 15 years and above. Overall,
while male LFPR is high across both regions, the striking increase in rural female
participation suggests shifting socio-economic patterns and growing involvement of women
in the labour force, although the gender gap still persists, especially in urban settings.

The table presents the Worker Population Ratio (WPR) in usual status (ps+ss) by education
level, gender, and location (rural, urban, and combined), based on PLFS 2023-24 for persons
aged 15 years and above

The data of PLFS 2023-24 clearly indicates the higher Worker Population Ratios (WPR)
observed in rural areas than in urban regions and the significantly higher WPR reported
among men in almost all educational levels compared to women. Men living in rural areas \
have the highest WPR, where they are involved in jobs irrespective of their level of
education. On the other hand, women in rural areas generally have low WPR, which is
further suppressed in urban areas and even for high levels of education. A noteworthy point
is that the WPR peaks in the diploma/certificate level for both males and females, and then
decreases for graduates and postgraduates, with a steeper drop observed in women,
indicating the possibility of a significant portion of highly educated females not being able
to get employed. Hence, the trend continues to show gender inequality and the need for
greater employment opportunities for particularly educated women, especially those
residing in urban areas.
The table provides the percentage distribution of workers (in usual status: ps+ss) by broad
industry divisions for rural, urban, and combined areas, segmented by gender, based on
PLFS data for 2021–22, 2022–23, and 2023–24.

During 2023-24 and 2024-25, it is observed that the employment landscape of women in
India using PLFS data continues to be one of continuity and change. In rural areas,
agriculture continues to be the main occupation for women, with a marginal decrease from
76.2% in 2022-23 to 74.6% in 2023-24. This signifies that there continues to be a lack of
diversification of employment opportunities for women in rural India and their
concentration in low-paid, non-permanent, or seasonal agricultural occupations. The share
of women in manufacturing (8.2% to 8.1%) and construction (around 4.1%-4.2%) also
remains the same in 2023-24, reflecting that women have not yet moved out of agriculture
to a significant extent in spite of policy emphasis on employment in non-agricultural
sectors.

On the other hand, the urban women have a wide range of job opportunities. The most
important job opportunity for them is the manufacturing sector, in which they are getting
employed from 25.6 percent in 2021-22 to 27.4 percent in 2023-24. This is being
dominated by the textile, apparel, and food processing sector. The services sector is a major
employer of women, with the share of services in the employment of urban women being
41.4 percent in 2021-22 to 41.2 percent in 2023-24. The services sector is now also
providing a job opportunity for the women in the health sector, education, public admin,
and household services and other sectors. This reflects the increasing feminization of care
and other informal service sectors in the urban area. Trading, hotel, and restaurant related
jobs are the sectors where women employees are increasing, as it has increased from 5.2
percent in 2021-22 to 5.6 percent in 2023-24.

Remarkably, in rural and urban settings, females are in small numbers in building,
transport, and sectors like electricity and mining, which require more capital and abilities
and are male-dominated. In 2023–24, just 3.1% of urban women participate in agriculture,
reflecting both urban migration and structural differences in urban job markets.

On the whole, rural women are still overwhelmingly dependent on farming, and their
opportunities for shifting sectors are limited, whereas their urban counterparts are
increasingly finding work in construction, industrial, and trade sectors. Despite this, their
presence in both sectors is still characterized by low-income, informal labor. Therefore,
specific steps should be taken, such as creating specialized women-oriented training
programs in various fields, providing better opportunities for formal employment, creating
more comfortable and safe working environments for female employees, and supporting
women in independently starting businesses.
4. Data Methodology

Objective
The primary objective of this study is to examine the socio-economic determinants of
female labour force participation rate (FLFPR) in India over the period 1990 to 2023, using
data sourced from the World Bank. Specifically, this analysis aims to evaluate how GDP per
capita (current US$), fertility rate (births per woman), and female secondary school
enrollment (% gross) influence women's participation in the labour market.

Hypothesis
Based on theoretical expectations and existing literature, the following hypotheses are
formulated:

 H1 (GDP per capita):

Null Hypothesis (H0): There is no relationship between GDP per capita and female
labour force participation.
Alternative Hypothesis (H1): Higher GDP per capita is associated with either an
increase or decrease in FLFPR (the sign is ambiguous due to the U-shaped
hypothesis in labour economics).

 H2 (Fertility rate):
Null Hypothesis (H0): Fertility rate has no effect on female labour force
participation.
Alternative Hypothesis (H1): Higher fertility rates are associated with lower
FLFPR (expected negative relationship).

 H3 (Female secondary school enrollment):

Null Hypothesis (H0): Female secondary school enrollment does not influence
FLFPR.
Alternative Hypothesis (H1): Higher female school enrollment is associated with
higher FLFPR (expected positive relationship).
Methodology

I have collected the data on female labour force participation rate, GDP per capita (current
US$), Fertility rate total (births per woman) and School Enrollment Secondary Female (% Gross)
of India from world bank data source for the period 1990-2023.

I have done regression analysis using excel and regressed female labour force participation rate
(Dependent variable) on GDP per capita, Fertility rate and female school enrolment
(Independent variables).

Regression Equation:

To estimate the relationship, the following linear regression model will be used:

FLFPRt = β0 + β1⋅GDPt + β2⋅Fertilityt + β3⋅SchoolEnrollt + ϵt

Where:

 FLFPRt = Female labour force participation rate in year t

 GDPt = GDP per capita (current US$) in year t

 Fertilityt = Fertility rate (births per woman) in year t

 SchoolEnrollt = Female secondary school enrollment (% gross) in year t

 ϵt = Error term

 β0 = Intercept

 β1, β2, β3 = Coefficients to be estimated

DATA TABLE
Interpretations:
R Square (0.8044)
This means 80.44% of the variation in the dependent variable (likely FLFPR) is explained by
the independent variables (GDP per capita, fertility rate, and school enrollment). This is a
very high explanatory power.

Adjusted R Square (0.7849):

Adjusted for the number of predictors and sample size, 78.49% of the variation is still
explained by the model. This means the added variables are useful and not just inflating R²
artificially.

Multiple R (0.8969):
This is the correlation coefficient between actual and predicted values. Close to 1, so it
indicates a strong positive relationship between the model’s predictions and actual
outcomes.

Significance F: 9.4661E-11 (i.e., very close to 0)

This is the p-value for the F-test, testing whether your model (with predictors) is
significantly better than a model with no predictors.

Since it's far less than 0.05, the overall model is statistically significant.

Variable Coefficient P-Value Significance Interpretation

Intercept 99.35 2.19E-11 Yes Represents baseline FLFPR when all predictors
are zero.

GDP per 0.00029 0.8379 No Statistically insignificant; GDP per capita does
capita not have a meaningful impact on FLFPR in this
(current model.
US$)
Fertility rate -12.63 2.84E-07 Yes A one-unit increase in fertility rate is
(births per associated with a 12.63-point decrease in
woman) FLFPR.
School -0.596 3.51E-07 Yes A 1% increase in female secondary school
Enrollment, enrollment is associated with a 0.596-point
Secondary, decrease in FLFPR. This counterintuitive result
Female (%) may suggest women delay entry into the
labour force due to extended schooling or
other social barriers.
FLFPR AND GDP PER CAPITA

GDP per capita (current US$)

3000.000000

2500.000000

2000.000000

1500.000000

1000.000000

500.000000

0.000000
24 26 28 30 32 34 36

The scatter plot titled "GDP per capita (current US$)" shows a negative correlation
between FLFPR (Female Labor Force Participation Rate) and GDP per capita.

Observations:

 As GDP per capita increases (on the vertical axis), FLFPR (on the horizontal axis)
generally decreases.

 The pattern suggests a U-shaped relationship, where FLFPR declines with rising
GDP up to a point, and then begins to rise again slightly at higher income levels.

 The dotted trendline indicates the general direction of the correlation, showing a
downward slope, confirming the initial negative correlation.

Interpretation:

This is consistent with the "U-shaped hypothesis" in labour economics, where women's
labour force participation initially falls with development (due to shifts from agriculture to
industry and social norms) and then rises again as education and service sector
opportunities increase.
PREDICTED FLFPR

Predicted female labour force participation rate

40
35
30
25
20
15
10
5
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
The predicted FLFPR starts around 30, increases and peaks around observation 9–11, close
to 35%. After that, there is a gradual decline in FLFPR down to about 26% by observation
25. Some minor fluctuations occur towards the end, but the general trend is a rise followed
by a decline.

5. Policy Recommendations

Targeted Skill Development & Vocational Training

Develop training programs for women targeting popular non-farming areas such as
manufacturing, IT, health, and retail. Increase the number of specific skill-training programs
in rural regions in order to assist in moving females from poorly compensated farm work to
more steady, salaried work.

Strengthen Financial Inclusion

Promote bank account ownership and active use and encourage self-employment through
microfinancing for women. Advocate for digital literacy to boost financial inclusion and
entrepreneurship.

Improve Quality and Accessibility of Jobs

Firms can be motivated to hire, maintain women by way of tax relief subsidies or awards.
Support and promote flexible working schedules and remote jobs.

Address Educational-Economic Mismatch

Create a connection between education and job readiness by making sure that secondary
and post-secondary education prepare students for the job market challenges. Incorporate
advice on professions and employment opportunities, particularly for well-educated city
women encountering obstacles to getting jobs.

Fertility and Family Support Policies

Encourage the utilization of family planning, low-cost childcare, and maternity leave to
reduce the stress on women requiring care work. Establish additional daycare centers and
preschools closer to the work environment and city neighborhoods.
6. Conclusion
An enduring problem in India is the low Female Labour Force Participation Rate (FLFPR),
which, despite economic growth and an increase in female education level, remains a
significant problem. Through empirical regression analysis and access to the latest Periodic
Labour Force Survey (PLFS) data, this research has found that macroeconomic variables
such as GDP per capita have no direct relation to Female Labour Force Participation Rate.
However, other factors such as the fertility rate and the percentage of women who complete
secondary education significantly influence the Female Labour Force Participation Rate. In
particular, a high fertility rate is associated with a low Female Labour Force Participation
Rate, reflecting the high levels of unpaid labor that women must undertake in the home.

Paradoxically, data suggests there is a negative relationship between female secondary

education enrollment and FLFPR, which implies that education gains might be preventing
women from entering the labor force. Education gains have not been matched by job
growth, inclusive labor markets, or labor market support systems. This calls for a more
scrutiny into the relationship between education systems and labor markets.

Moreover, the study highlights the significant differences between rural and urban areas,
although the performance of FLFPR in rural areas has improved in recent times, it is still
focused on low-income, agricultural and informal sectors. Urban women, on the other hand,
despite having access to better educational infrastructures, have to face societal and
technical challenges, for instance, issues such as security, discrimination in the workplace
and the lack of flexible labor. Moreover, there is often a problem for city girls as they often
fail to find a job that matches their qualifications because of the lack of demand in an area
with a similar skill-set.

India’s female labor force is not used to the fullest extent it could be, which is a shame
because it could provide a boost to the economy and the status of women. Getting more
women into the workforce is not just the right thing to do; it’s also a smart economic
strategy. This will require a multi-faceted approach, including labor reforms, educational
changes, cultural shifts, and infrastructure upgrades. If India can get this right, it will be able
to boost its FLFPR and take advantage of an entire half of its population that is currently
being overlooked.
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