Penn Calendar Penn A-Z School of Arts and Sciences University of Pennsylvania

Dropping Out, Being Pushed Out, or Can’t Get In? Decoding Declining Labor Force Participation of Indian Women

in partnership with the South Asia Center

Ashwini Deshpande
Professor of Economics and Founding Director, Centre for Economic Data and Analysis (CEDA), Ashoka University
Thursday, December 2, 2021 - 12:00
A Virtual CASI Seminar via Zoom — 12 noon EST | 10:30pm IST

About the Seminar:
The stubbornly low and declining level of labor force participation rate (LFPR) of Indian women has prompted a great deal of attention with a focus on factors constraining women's labor supply. Using 12 rounds of a high frequency household panel survey, Prof. Deshpande demonstrates volatility in Indian women's labor market engagement as they exit and (re)enter the labor force multiple times over short periods for reasons unrelated to marriage, childbirth, or change in household income. She demonstrates how these frequent transitions exacerbate the issue of measurement of female LFPR. Women elsewhere in the world face a "motherhood penalty" in the form of adverse labor market outcomes after the first childbirth. She evaluates the motherhood penalty in the Indian context and finds that mothers with new children have a lower base level of LFPR, but there is no sharp decline around the time of childbirth. Blinder-Oaxaca decomposition of determinants of female LFPR suggests that none of the total fall (10 percentage points) in her study period is explained by a change in supply-side demographic characteristics. She suggests that frequent transitions, as well as fall in LFPR, are consistent with the demand-side constraints, viz., that women's participation is falling due to the unavailability of steady gainful employment. The high unemployment rate and industry-wise composition of total employment provide suggestive evidence that women's participation is falling as women are likely to be displaced from employment by male workers. She shows that women's employment is likely to suffer more than men's due to negative economic shocks, as was seen during the fallout of demonetization of 86 percent of Indian currency in 2016. Her analysis contests the prominent narrative that women are voluntarily dropping out of the labor force due to an increase in household income and conservative social norms. Her results suggest that India needs to focus more on creating jobs for women to retain them in the labor force.

About the Speaker:
Ashwini Deshpande is Professor of Economics and the Founding Director of the Centre for Economic Data and Analysis (CEDA) at Ashoka University. Her Ph.D. and early publications have been on the international debt crisis of the 1980s. Subsequently, she has been working on the economics of discrimination and affirmative action, with a focus on caste and gender in India. She is the author of Grammar of Caste: Economic Discrimination in Contemporary India (Oxford University Press, New Delhi, 2011) and Affirmative Action in India (Oxford University Press, New Delhi, Oxford India Short Introductions Series, 2013). She is the editor, along with William Darity, Jr., of Boundaries of Clan and Color: Transnational Comparisons of Inter-Group Disparity (Routledge, London, 2003); Globalization and Development: A Handbook of New Perspectives (Oxford University Press, New Delhi, 2007); Capital Without Borders: Challenges to Development (Anthem Press, UK, 2010), and Global Economic Crisis and the Developing World, with Keith Nurse, (Routledge, London, 2012). She received the EXIM Bank Award for outstanding dissertation (now called the IERA Award) in 1994 and the 2007 VKRV Rao Award for Indian economists under 45.