Why in the news?
- Recent Data from the Centre for Monitoring Indian Economy (CMIE) shows that India’s labour force participation rate (LFPR) has fallen to just 40% from an already low 47% in 2016.
- This suggests not only that more than half of India’s population in the working-age group (15 years and older) is deciding to sit out of the job market, but also that this proportion of people is increasing.
What is Labour Force Participation Rate?
- According to the CMIE, the labour force consists of persons who are of age 15 years or older, and belong to either of the following two categories:
- are employed
- are unemployed and are willing to work and are actively looking for a job.
- There is a crucial commonality between the two categories — they both have people “demanding” jobs.
- The Unemployment Rate (UER) is the number of unemployed as a proportion of the labour force.
What is the significance of LFPR in India?
- The world average of LFPR is around 60%. In India, it has been sliding over the last 10 years and has shrunk from 47% in 2016 to just 40% as of December 2021.
Why is India’s LFPR so low?
- The main reason for India’s LFPR being low is the abysmally low level of female LFPR. According to CMIE data, as of December 2021, while the male LFPR was 67.4%, the female LFPR was as low as 9.4%.
- In other words, less than one in 10 working-age women in India are even demanding work. Even if one sources data from the World Bank, India’s female labour force participation rate is around 25% when the global average is 47%.
Why do so few women demand work?
- Three primary reasons includes about the essentially about the working conditions — such as law and order, efficient public transportation, violence against women, societal norms etc — being far from conducive for women to seek work.
- Secondly, it’s about to do with correctly measuring women’s contribution to the economy. For example, Care Economy of women is not calculated
- Lastly, it is also a question of adequate job opportunities for women.