Retreat of female labour participation

The age-wise distribution of the labour force participation rate looks like an inverted U. At a young age (15 to 19 years), very few people seek employment. This is understandable. Most are still likely studying.  According to the January-April 2022 Wave of Consumer Pyramids Household Survey, only 4.2 per cent of this age group sought employment.  Agniveers are chosen largely from this age bracket.  

The proportion of population that seeks employment, i.e. the labour participation rate, rises rapidly with age. About 34 per cent of people in the age group 20-24 years sought employment during the January-April 2022 period. Then, during the best working age – from 25 to 59 years, the LPR rises to 50-60 per cent. At the other end of the age spectrum, only 24 per cent of people in the 60-64 years age bracket were participating in the labour market. And, 7 per cent of those of 65 years or more were also willing to participate.

This age distribution of the LPR is very different for men and women. For men, it is a well-formed inverted U-curve. For women it is a less well-formed inverted U-curve. Recent contortions to this curve indicate that a greater proportion of young women join the labour force but many more could be exiting the labour markets early, in their late 20s and early 30s and re-joining in the late 30s. This is different from the behaviour of men.

The LPR for men rises from 6 per cent in the 15-19 years age bracket to 46 per cent in the 20-24 years bracket. Then it rises sharply to over 90 per cent. The average LPR for men in the 25-59 years age groups is 95 per cent. This has always been over 90 per cent. Evidently, most grown-up men do seek employment.  

Men’s participation in the labour market drops in their early sixties. This corresponds to what in India is usually understood as the retirement age. The LPR for men in the age group 60-64 years drops to 46 per cent. It drops further for men over 64 years but is still quite significant at about 13 per cent. This significant labour force participation of the senior citizens justifies the use of a more inclusive age range in the computation of the LPR than the erstwhile range of 15 to 60 or 65 years of age.

Female labour participation rate is significantly lower than male LPR. During January-April 2022, male LPR was 66 per cent while the female LPR was 9 per cent. While the male LPR for the age-group 25-59 years is systematically over 90 per cent, the female LPR has never breached 20 per cent for any age group. 

While the age distribution of the LPR for men has been largely stable through the economic shocks since 2016, this is not the case for women. The inverted-U curve of age-distribution of LPR for men has remained largely unchanged. But, that for women has shifted to significantly lower levels. CMIE has conducted 19 Waves of the CPHS survey since 2016 when it started monitoring labour markets. A statistical profile for each Wave is available freely at https://unemploymentinindia.cmie.com/kommon/bin/sr.php?kall=wstatmore. We use the data available in these to understand the shift in the age-distribution of the LPR. For brevity we use just four points in time – January-April of 2016, 2018, 2020 and of 2022.

The female LPR curve for 2016 is distinctly the highest. This means that the female LPR in each age group in 2016 was clearly higher than it was in subsequent periods. The curve of 2018 is well below the 2016 curve. But, 2020 depicts a small but significant departure. The curve is largely below the 2018 curve indicating continued fall in the LPR across age groups. But, LPR for women of the 20-24 age group is an exception. The female LPR in this age bracket was 10.91 per cent in 2018. In 2020, this went up to 12.91 per cent. Young women had started to come back to the labour markets in greater numbers during 2018-2019.

The trend of young women entering the labour markets in larger proportions began after the Wave of May-August 2018 when the female LPR was 10.28 per cent. From here it climbed steadily in every subsequent Wave to reach 14.31 per cent in the Wave of September-December 2019. This was the last Wave before the pandemic. 

The pandemic and the lockdowns arrested the steady growth in the LPR of women in the 20-24 age bracket. The ratio fell to its lowest at 8.7 per cent in May-August 2020. Its recovery to 10.9 per cent during September-December 2020 was promising. But, the further progress of young women of 20-24 years joining the labour markets has since stalled at around 10.5 per cent.

Female LPR saw one more change sometime between 2018 and 2019. Earlier, the LPR rose sharply in the 20-24 year age bracket and then continued to grow till the late thirties. The decline in female LPR began in the forties. Post 2018, while the LPR shot up better in the 20-24 age bracket, it slid back during the age group 25-34 years before rising again in the late thirties and then beginning its decline. Female LPR in the 25-29 years age bracket is lower than it is in the 20-24 years group. This retreat of a young female work force is worth investigating.