Does development mean more women in work? Yes in Pakistan but not India, says World Bank study

New Delhi: It is generally accepted that economic development and women’s participation in the labor force go hand in hand. However, a study by the World Bank found that the relationship is more complex in South Asia – especially in India – than previously thought.

Published in April this year in the World Bank’s South Asia economic focusSpring 2022, this study, entitled ‘Reshaping Norms: a New Way Forward’, found that economic development has coincided with an increase in women’s participation in the labor force in some South Asian countries such as Pakistan and Bangladesh, but only to a point in India.

The study took into account the gross domestic product (GDP) based on purchasing power parity (PPP) from 1985 to 2019. PPP is the course against which one country’s currency must be converted into another’s to buy the same amount of goods and services.

It found that female labor force participation (FLFP) – the percentage of women currently employed or unemployed who are actively looking for work – differs from country to country in South Asia. The study also found that FLFP in India fell after per capita income exceeded $ 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.

“India has seen a weak but positive relationship between FLFP and GDP per capita growth at levels of development roughly below US $ 3,500 per capita and declines beyond this point,” the report said.

The study also notes that in South Asian countries, there was no positive correlation between an increase in female education levels and a decrease in fertility levels on the one hand, and women’s participation in the labor force on the other. (Positive correlation means when one measure increases, the other also increases in a similar ratio.)

Although the report cites trends in India’s FLFP in terms of economic growth, it gives no clear reason for this. Maurizio Bussolo, chief economist at the World Bank’s South Asia office and lead author of the study’s chapter on gender, said in an email to ThePrint that India’s conservative social norms could explain at least part of the phenomenon.

“[In our report] “We emphasize that the potential failure of economic growth to bring about increases in FLFP can be linked to restrictive social norms that act as barriers to women’s involvement in the labor market,” Bussolo said.

Gender economist Alice Evans, who teaches development economics at King’s College, London, believes India has been caught in a “patrilineal trap”..

“Female employment only increases when earnings are high enough [in order] to compensate for the loss of male honor, ”she told ThePrint. “Given unemployment growth, female employment remains low.”

Also read: Covid cut Indian women out of labor market, now 90% are not in the labor force

U-shaped relationship

The study says there is generally a U-shaped ratio between per capita income (measured in terms of PPP) and FLFP. That is, as economic development takes place or as per capita income rises from lower levels, women’s participation in the labor force decreases to a point and then rises.

The study claims that when a country is largely agrarian, women’s participation in agriculture and related activities is higher. However, as a country industrializes and the need to have more working hands decreases, this participation decreases, largely due to social prejudices against women working in manufacturing units.

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

However, the study shows that the growth trajectory is not uniform in South Asian countries. For example, in Sri Lanka and Nepal, the FLFP has hardly changed despite economic development. In Bangladesh, Bhutan, Pakistan, and the Maldives, a rise in per capita income corresponds to a rise in FLFP. India also saw a similar corresponding increase, but only until it reached a per capita income of $ 3,500, the study shows.

According to the World Bank estimatesBangladesh had a FLFP of 35 percent, Pakistan 21 percent and India 19 percent in 2021.

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

“It holds families in uncertainty, strengthens dependence on kinship and encourages jati“endogamy (the practice of getting married in one’s closet),” she told ThePrint in an email. “In addition, employers regularly subcontract to home workers to artificially reduce the size of their firm and circumvent labor regulations. This kind of informal ‘gig’ work keeps many women trapped by family supervision and control. ”

The study also observes that while almost all developing countries show a positive correlation between women’s education and FLFP that is “almost causal,” South Asia does not show this trend.

“In South Asia, however, primary and secondary school enrollment rates have improved dramatically over time and have either converged or come very close to levels in more developed regions, without proportional improvements in FLFP,” the report said.

It made similar observations for declining fertility rates driven by improvements in female education, increases in marital age, and declines in infant mortality rates.

“In general, a decrease in fertility tends to increase FLFP, as the opportunity cost of women’s time decreases. However, most countries in South Asia have experienced a significant reduction in the number of children that an average woman has in her lifetime, with fertility rates now around the replacement level, ”the report reads.

Bussolo told ThePrint that the effect of conservative social norms in India was so strong that India’s female labor force participation at work should have been higher at the current level of its per capita income.

“Indeed, with the help of data for India and other countries, we are showing two things. “Firstly, attitudes (a proxy for social norms) towards gender roles have not improved in recent decades, and a growing majority of people in countries like India believe that ‘men have more rights to work than women’,” he said.

“Secondly, we show that, when it is possible to measure this, conservative social norms form a significant part of the FLFP deficit, that is to say for the fact that India should have a higher FLFP rate at its level of development. , “he added.

(Edited by Uttara Ramaswamy)

Also read: In India’s labor market women have a higher exit rate, lower entry rate than men: Study

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