Indian Women's Labor Force Participation Falls to Just 19%, Lower Than Pakistan's 21%

Female labor force participation rate in India has recently fallen to just 19%, the second lowest after Afghanistan's 15% in the South Asia region. By contrast, Pakistan's women's labor force participation rate is 21%, Sri Lanka's 31% and Bangladesh's 35%. Prime Minister Narendra Modi's mishandling of the COVID19 pandemic has hit Indian women particularly hard, with 90% of those who lost their jobs now shut out of the workforce. 

Female Labor Force Participation Rate in South Asia. Source: World Bank


The precipitous loss of women workers is disastrous news for India's economy, which had started slowing before the COVID19 pandemic, according to a Bloomberg report. Rosa Abraham, an economics professor at Azim Premji University in Bengaluru, tracked more than 20,000 people as they navigated the labor market during the pandemic.. She found that after the first lockdown, women were several times more likely to lose their jobs than men and far less likely to recover work after restrictions were lifted. "When men are faced with this kind of a huge economic shock, then they have a fallback option," Abraham told Bloomberg. "They can navigate to different kinds of work. But for women, there is no such fallback option. They can't negotiate the labor market as effectively as men do." 

Women accounted for less than 11% of all jobs in 2019-20. But, they accounted for nearly 52% of the 7 million job losses since then, according to the Center for Monitoring Indian Economy (CMIE).  It gets worse in urban India. Women accounted for only 9% of total employment in urban India but they accounted for a massive 76% of the job losses here. The impact of this is a sharp fall in the labor participation of women. The female labor force participation rate among urban women was abysmally low at 9.4% in 2019-20 and it has since fallen to 7% in 2021-22.

COVID19 Pandemic Impact on Employment in India. Source: Bloomberg

Modi government has underplayed the death toll and the negative impact of the COVID19 pandemic in India. But the World Health Organization estimates that India had 4.730 million COVID19-related  deaths in 2020-21, nearly a third of 15 million global excess deaths attributed to the pandemic. India is followed by Russia with 1.073 million deaths and Indonesia with 1.03 million deaths. The United States with 933,795 deaths and Brazil with 681,219 deaths round out the top 5 countries that suffered the heaviest losses of life believed to be related to the pandemic. Mexico (625,923 deaths), Peru (289,654 deaths), Turkey (264,279 deaths) Egypt (251,635 deaths) and South Africa (238,893 deaths) are ranked number 6 through 10 in the world for excess deaths in 2020-21 period. Although Pakistan too had 8 times the official figure, it still does not figure in WHO's top 10 list for total number of COVID deaths. 

It's not just Indian women who have suffered job losses. India's overall labor participation rate (LPR) fell to 39.5% in March 2022, as reported by the Center for Monitoring Indian Economy (CMIE). It dropped below the 39.9% participation rate recorded in February. It is also lower than during the second wave of Covid-19 in April-June 2021. The lowest the labor participation rate had fallen to in the second wave was in June 2021 when it fell to 39.6%. The average LPR during April-June 2021 was 40%. March 2022, with no Covid-19 wave and with much lesser restrictions on mobility, has reported a worse LPR of 39.5%.

Labor Participation Rates in India and Pakistan. Source: ILO/World Bank


Youth  unemployment for ages 15-24 in India is 24.9%, the highest in the South Asia region. It is 14.8% in Bangladesh 14.8% and 9.2% in Pakistan, according to the International Labor Organization and the World Bank.  

Youth Unemployment in Bangladesh, India and Pakistan. Source: ILO, WB


In spite of the headline GDP growth figures highlighted by the Indian and world media, the fact is that it has been jobless growth. The labor participation rate (LPR) in India has been falling for more than a decade. The LPR in India has been below Pakistan's for several years, according to the International Labor Organization (ILO). 

Indian Employment Trends By Sector. Source: CMIE Via Business Standard

Construction and manufacturing sectors in India have been shedding jobs while the number of people working in agriculture has been rising, according to CMIE. 

Pakistan Employment By Sectors. Source: PBS via Bilal Gilani

It is important to note that Pakistan’s economy has created 5.5 million jobs during the past three years – 1.84 million jobs a year, significantly higher than yearly average of new jobs created during the 2008-18 decade, according to the findings of Labor Force Survey (LFS) as reported by the Express Tribune paper. The biggest jump in share of employment (1.5%) was in the construction sector, spurred by Naya Pakistan construction incentives offered by the PTI government. 


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Riaz Haq said…
India’s Economy Is Growing Quickly. Why Can’t It Produce Enough Jobs?
The disconnect is a result of India’s uneven growth, powered and enjoyed by the country’s upper strata.

By Emily Schmall and Sameer Yasir

https://www.nytimes.com/2022/06/13/business/economy/india-economy-jobs.html

Among the job seekers despairing over the lack of opportunities is Sweety Sinha, who lives in Haryana, a northern state where unemployment was a staggering 34.5 percent in April.

As a child, Ms. Sinha liked to pretend to be a teacher, standing in front of her village classroom with fake eyeglasses and a wooden baton, to fellow students’ great amusement.

Her ambition came true years later when she got a job teaching math at a private school. But the coronavirus upended her dreams, as the Indian economy contracted 7.3 percent in the 2020-21 fiscal year. Within months of starting, she and several other teachers were laid off because so many students had dropped out.

Ms. Sinha, 30, is again in the market for a job. In November, she joined thousands of applicants vying for much-coveted work in the government. She has also traveled across Haryana seeking jobs, but turned them down because of the meager pay — less than $400 a month.

“Sometimes, during nights, I really get scared: What if I am not able to get anything?” she said. “All of my friends are suffering because of unemployment.”
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The struggles of working-class Indians, and the millions of unemployed, may eventually cause a drag on growth, economists say.
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NEW DELHI — On paper, India’s economy has had a banner year. Exports are at record highs. Profits of publicly traded companies have doubled. A vibrant middle class, built over the past few decades, is now shelling out so much on movie tickets, cars, real estate and vacations that economists call it post-pandemic “revenge spending.”

Yet even as India is projected to have the fastest growth of any major economy this year, the rosy headline figures do not reflect reality for hundreds of millions of Indians. The growth is still not translating into enough jobs for the waves of educated young people who enter the labor force each year. A far larger number of Indians eke out a living in the informal sector, and they have been battered in recent months by high inflation, especially in food prices.

The disconnect is a result of India’s uneven growth, which is powered by the voracious consumption of the country’s upper strata but whose benefits often do not extend beyond the urban middle class. The pandemic has magnified the divide, throwing tens of millions of Indians into extreme poverty while the number of Indian billionaires has surged, according to Oxfam.

The concentration of wealth is in part a product of the growth-at-all-costs ambitions of Prime Minister Narendra Modi, who promised when he was re-elected in 2019 to double the size of India’s economy by 2024, lifting the country into the $5 trillion-or-more club alongside the United States, China and Japan.

The government reported late last month that the economy had expanded 8.7 percent in the last year, to $3.3 trillion. But with domestic investment lackluster, and government hiring slowing, India has turned to subsidized fuel, food and housing for the poorest to address the widespread joblessness. Free grains now reach two-thirds of the country’s more than 1.3 billion people.

Those handouts, by some calculations, have pushed inequality in India to its lowest level in decades. Still, critics of the Indian government say that subsidies cannot be used forever to paper over inadequate job creation. This is especially true as tens of millions of Indians — new college graduates, farmers looking to leave the fields and women taking on work — are expected to seek to flood the nonfarm work force in the coming years.

“There is a historical disconnect in the Indian growth story, where growth essentially happens without a corresponding increase in employment,” said Mahesh Vyas, the chief executive of the Center for Monitoring Indian Economy, a data research firm.
Riaz Haq said…
India’s Economy Is Growing Quickly. Why Can’t It Produce Enough Jobs?
The disconnect is a result of India’s uneven growth, powered and enjoyed by the country’s upper strata.

By Emily Schmall and Sameer Yasir

https://www.nytimes.com/2022/06/13/business/economy/india-economy-jobs.html



But for Indian politicians, a high unemployment rate “is not a showstopper,” said Mr. Vyas, the economist, adding that they were far more concerned with inflation, which affects all voters.

India’s reserve bank and finance ministry have tried to tackle inflation, which is battering many countries because of pandemic-related supply chain problems and the war in Ukraine, by restricting exports of wheat and sugar, raising interest rates and cutting taxes on fuel.

The bank, after raising borrowing rates in May for the first time in two years, increased them again on Wednesday, to 4.9 percent. As it did so, it forecast that inflation would reach 6.7 percent over the next three quarters.

Reserve bank officials have also employed an array of fiscal and monetary tactics to continue supporting growth, which cooled in the first quarter of 2022, falling to 4.1 percent. Household consumption, a major driver of India’s economy, has dropped in the last few months.

“We are committed to containing inflation,” said the bank’s governor, Shaktikanta Das. “At the same time, we have to keep in mind the requirements of growth. It can’t be a situation where the operation is successful and the patient is dead.”

While the Bank of England and the Federal Reserve in the United States have said their countries need to accept lower growth rates because of high commodity prices, India’s reserve bank is not in that camp, said Priyanka Kishore, an analyst at Oxford Economics. “Growth matters a lot for India,” she said. “There’s a political agenda.”

The ban on food exports is a sharp turnabout for Mr. Modi. In response to Russia’s blockade on Ukrainian ports, which has led to a global shortage of grains, he had said in April that Indian farmers could help feed the world. Instead, with the global wheat shortfalls driving up prices, the Indian government imposed an export ban to keep domestic prices low.

Temporary interventions like these are easier than addressing the fundamental problem of large-scale unemployment.

“You have wheat in your godowns and you can ship it out to households and get instant gratification,” Mr. Vyas said, referring to storage facilities, “whereas trying certain policies for employment is far more protracted and intangible.”

Those policies, analysts say, could include greater efforts to build up India’s underdeveloped manufacturing sector. They also say that India should ease regulations that often make it difficult to do business, as well as reducing tariffs so manufacturers have an easier time securing components not made in India.

Exports have been a source of strength for the Indian economy, and the rupee has depreciated by about 4 percent against the U.S. dollar since the beginning of the year, which would normally boost exports.

But inflation in the United States and war in Europe have started to affect sales for Indian-made clothes, said Raja M. Shanmugam, the president of a trade association in Tiruppur, a textile hub in the state of Tamil Nadu.

“All the input cost is increasing. Even earlier this industry worked on wafer-thin margins, but now we are working on loss,” he said. “So a situation which is normally a happy situation for the exporters is not so anymore.”

The struggles of working-class Indians, and the millions of unemployed, may eventually cause a drag on growth, economists say.

Zia Ullah, who drives an auto-rickshaw in Tumakuru, an industrial city in the southern Indian state of Karnataka, said his income was still only about a quarter of what it was before the pandemic.

The $20 he used to earn daily was enough to cover household expenses for his family of five, and school fees for his three children.

“Customers are preferring to walk,” he said. “No one seems to have money these days to take an auto.”

Riaz Haq said…
Indian media on World Bank Report Reshaping Norms: A New Way Forward 2022

https://theprint.in/economy/does-development-mean-more-women-in-work-yes-in-pakistan-but-not-india-says-world-bank-study/1027868/

Does development mean more women in work? Yes in Pakistan but not India, says World Bank study
In India, women's participation in workforce fell after per capita income passed $3,500, says study published in World Bank's South Asia Economic Focus. Experts cite 'patrilineal trap'.

New Delhi: It’s generally assumed that economic development and women’s participation in the labour force go hand in hand. However, a World Bank study has found that the relationship is more complex in South Asia — particularly in India — than previously thought.

Published in April this year in the World Bank’s South Asia Economic Focus, Spring 2022, the study, titled ‘Reshaping Norms: a New Way Forward’, found that economic development corresponded with a rise in women’s participation in the workforce in some South Asian countries like Pakistan and Bangladesh, but only up to a point in India.

The study took into consideration Gross Domestic Product (GDP) based on purchasing power parity (PPP) from 1985 to 2019. PPP is the rate at which one country’s currency would have to be converted into another’s to buy the same amount of goods and services.

It found that female labour force participation (FLFP) — the percentage of women currently employed or unemployed actively looking for work — varies from country to country in South Asia. The study also found that in India, FLFP fell after per capita income surpassed $3,500.

The South Asian countries included in this particular analysis of the study were India, Sri Lanka, Bangladesh, Bhutan, Nepal, Pakistan, and the Maldives.

https://openknowledge.worldbank.org/bitstream/handle/10986/37121/9781464818578.pdf


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The study claims that when a country is largely agrarian, women’s participation in agriculture and allied activities is higher. However, as a country industrialises and as the need to have more working hands go down, this participation declines, largely due to societal biases against women working in manufacturing units.

The curve rises again at higher-income levels as a result of growth in the service sector coupled with higher education levels among women and a lower fertility rate (that is, the number of children born alive to women of that age during the year as a proportion of the average annual population of women of the same age).

The study, however, shows that the growth trajectory isn’t uniform across South Asian countries. For instance, in Sri Lanka and Nepal, the FLFP has barely changed despite economic development. In Bangladesh, Bhutan, Pakistan, and the Maldives, a rise in per capita income corresponds with a rise in FLFP. India, too, saw a similar corresponding rise but only until it reached a per capita income of $3,500, the study shows.

According to the World Bank’s estimates, Bangladesh had an FLFP of 35 per cent, Pakistan 21 per cent and India 19 per cent in 2021.


Evans told ThePrint that although both Bangladesh and Pakistan have low female employment, “an additional constraint in India may be labour regulation, which suppresses job-creation in the formal economy”.

“It traps families in precarity, reinforces reliance on kinship, and encourages jati-endogamy (the custom of marrying within one’s caste),” she told ThePrint via email. “Moreover, employers frequently subcontract to home-based workers in order to artificially reduce the size of their firm and circumvent labour regulations. This kind of informal ‘gig’ work keeps many women trapped by family surveillance and control.”
Riaz Haq said…
Empowering Women in Pakistan’s Economy: Lessons from Bangladesh
Written by Noorulain Naseem, Hadiqa Sohail
October 3, 2022


https://southasianvoices.org/empowering-women-in-pakistans-economy-lessons-from-bangladesh/


Empowering and including women in the economy could be the untapped potential necessary to drive growth and development that is essential for reviving a staggering economy. Pakistan’s GDP could increase by 60 percent by 2025 if the female labor force becomes equal to the male labor force. However, to improve the access of women to the workforce in Pakistan, a deep knowledge of cultural and institutional constraints is important. Pakistan has the lowest level of gender parity when compared with other South Asian states. Offering an important comparative context, Bangladesh’s recent progress is a compelling case in particular as it is a relatively younger country, also has a Muslim majority, and faced alarming levels of poverty in the past but has been able to revive its economy, literacy rate, life expectancy and increase women participation in the workforce to 35 percent in recent years. Bangladesh’s can offer a powerful lesson in successful policies that bring women into economic development.

Living standards for many Pakistani women, and lack of access to health and education especially in rural areas are a substantial obstacle to economic empowerment. This is especially true in the former Federally Administered Tribal Areas (FATA) regions, where only 1 in 10 girls can read, and 50 percent of young girls have never stepped into a school. In Balochistan—which has the lowest female literacy rate of 24 percent in all of Pakistan’s provinces—67 percent of girls are out of school and female labor participation stands at just 4.9 percent. In addition, the health sector of rural sectors, especially the ex-FATA region, reflects dire conditions: women who give birth under medical care falls at around 26 percent in the ex-FATA regions. Lack of education, poor health, and absence from the formal economy eventually result in low levels of essential skillsets and financial independency.

The dire economic stagnation and lack of gender parity in Pakistan can be addressed by the introduction of women-centric developmental strategies by state institutions, international aid organizations, and endorsement of women’s economic empowerment at local level leadership. Community level programs can invest in building the sense of urgency to invest in women education, health, encourage entrepreneurship, with the intention of building a women workforce; that is skilled and facilitated at state and community level to corresponding industry and production requirements. This investment will be effective in twofold manner: first, internally, it will help drive the young female population’s appetite to achieve milestones in education, health, and contribute to innovation and in turn to the growth of economy. Externally, Pakistan’s untapped female skilled labor can help position Pakistan better in the competition with the regional and global economies. Calling for the female youth towards action and share responsibility, while also preparing and training this potential workforce can enable Pakistani women to help the state and its communities in overcoming the economic and development challenges.

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