What Explains the Stagnation of Female Labor Force Participation in Urban India?

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Abstract

Female labor force participation rates in urban India between 1987 and 2011 are surprisingly low and have stagnated since the late 1980s. Despite rising growth, fertility decline, and rising wages and education levels, married women's labor force participation hovered around 18 percent. Analysis of five large cross-sectional micro surveys shows that a combination of supply and demand effects have contributed to this stagnation. The main supply side factors are rising household incomes and husband's education as well as the falling selectivity of highly educated women. On the demand side, the sectors that draw in female workers have expanded least, so that changes in the sectoral structure of employment alone would have actually led to declining participation rates.