India’s quest for high economic growth and social equity hinges on an obvious but underrated lever — its women’s workforce. Despite significant progress in education and health care, the country lags in enabling women’s economic participation. A staggering 60% of India’s women of working-age remain outside the labour force, depriving the economy of their contributions. A new study by the writers, titled “Unlocking Women’s Workforce Potential in India: Quantifying the Labour Market Impact of Formalising Part-time Employment and Gender Equality in Unpaid Care Work”, published by the National Council of Applied Economic Research (NCAER), delves into two key barriers to women’s labour force participation: the unequal burden of unpaid care work and the lack of formal part-time employment opportunities. The findings provide actionable insights for policymakers to unlock India’s untapped workforce potential.
India’s female labour force participation rate (LFPR) stands at 37%, well below the global average of 47% and the Organisation for Economic Co-operation and Development (OECD) average of 67%. The reasons are multifaceted, stemming from multifaceted barriers faced by women. A key barrier relates to unpaid domestic responsibilities that women carry disproportionately, such as child-rearing, elder care, and household chores. According to the Time Use in India Report 2019, Indian women devote more than twice as much time to unpaid care work as compared to men, leaving them with limited opportunities for paid employment.
A second barrier that women in particular face is the absence of formal part-time work options. Unlike in advanced economies, where part-time employment is legislated, well-regulated and socially accepted, Indian does not have formal provisions for part-time work. Women who seek flexibility to balance professional and domestic duties often end up in informal, precarious jobs, with no job security or social benefits. This dual burden of paid and unpaid work not only limits a woman’s career prospects but also affects her ability to contribute to India’s economy.
Study and its findings
The writers conducted a study to quantify the increase in female labour force participation rates (LFPR) when these two barriers are addressed. They used the McCall-Mortensen job search model to simulate the impact of formalising part-time employment and redistributing unpaid care work between men and women. They found that addressing just two barriers faced by women could raise the female LFPR by six percentage points, from 37% to 43%.
The study identifies two key interventions. First, formalising part-time employment: introducing formally recognised part-time work contracts with pro-rated wages and benefits would offer women the flexibility they need. Globally, 57% of women in part-time jobs cite flexibility as a key factor. In India, however, the lack of formal recognition for part-time work means that women often face exploitation and uncertain employment prospects. Second, redistributing unpaid care work: gender equality in caregiving responsibilities is crucial in enabling women to participate in the labour force. This requires both policy measures, such as paid parental leave and public investment in childcare infrastructure, and cultural changes that abandon traditional gender roles.
The study highlights best practices from advanced economies that India could adapt. For instance, Scandinavian countries have robust policies for part-time work, parental leave, and subsidised childcare, which have significantly boosted female workforce participation. In France, part-time workers receive the same protections and benefits as full-time employees, ensuring equitable treatment. The European Union’s directives on part-time work, adopted in the late 1990s, mandate equal pay and social security for part-time workers. India’s labour laws, by contrast, remain silent on these issues, perpetuating systemic inequalities
Policy recommendations
The paper’s findings underscore the need for a multi-pronged policy approach. First, formalising part-time work: India must define and formalise part-time employment. This includes setting hourly minimum wages (the smallest unit for defining minimum wages in India is per day and not per hour), ensuring job security, and providing access to social security benefits. Formalising part-time work would create a structured pathway for women to enter the workforce while balancing caregiving responsibilities.
Second, investing in care infrastructure. Public and private investment in affordable childcare and eldercare facilities yield many benefits to private companies and the macroeconomy, as international studies have shown (Council of Economic Advisors, U.S) . Such measures would not only reduce the caregiving burden on women but also create new employment opportunities in the care economy.
Third, promoting gender equality in caregiving. Policies such as paid parental leave for both parents and tax incentives for shared caregiving responsibilities can help redistribute unpaid care work. Awareness campaigns to challenge societal norms and promote gender equity are equally important.
Fourth, flexible work policies. Employers should adopt flexible work arrangements, such as remote work and adjustable schedules, to support employees with caregiving responsibilities. This move would also be in the self-interest of companies because their output and productivity can be expected to increase.
Boosting female labour force participation is not just a matter of gender equality, but is also an economic imperative. Research by the International Monetary Fund estimates that closing the gender gap in labour force participation could increase India’s GDP by 27%. Higher female LFPR would lead to greater household incomes, improved standards of living, and enhanced economic productivity.
The ripple effects extend beyond the economy. When women participate in the workforce, it shifts societal perceptions of gender roles, inspiring younger generations and fostering a culture of equality. Moreover, women’s financial independence contributes to better health and education outcomes for their families, creating a virtuous cycle of development.
Challenges to implementation
While the benefits of these interventions are clear, their implementation poses significant challenges. Deeply ingrained cultural norms often resist change, making it difficult to redistribute caregiving responsibilities. Employers may be reluctant to adopt flexible work policies without government regulation. Additionally, the informal nature of India’s labour market, where over 80% of workers are employed, complicates the formalisation of part-time work.
Addressing these challenges requires coordinated efforts from policymakers, employers, and civil society. The government must take the lead by formalising labour reforms and investing in care infrastructure, as is common in many advanced economies. Employers should recognise the business case for diversity and flexibility, which have been shown to improve employee retention and productivity. Civil society organisations should continue to play a crucial role in raising awareness and advocating for gender equality.
As the country aspires to become a developed nation by 2047, harnessing the potential of its women’s workforce is essential. By formalising part-time employment, redistributing unpaid care work, and promoting gender equality in its society, India can unlock a brighter, more inclusive path for its society today and for future generations. The time to act is now.
Aakash Dev is an Associate Fellow in the Center on Gender and the Macroeconomy (CGM) at the National Council of Applied Economic Research (NCAER), India. Ratna Sahay is a Professor at the National Council of Applied Economic Research (NCAER), India and a Non-Resident Fellow at the Center for Growth and Development, Washington DC
Published – February 12, 2025 04:10 am IST
