Why Changing Structure Of Women's Employment Is Worrying

The persistent stagnation in average earnings contradicts the notion of overall economic improvement or upward mobility.

<div class="paragraphs"><p>(Source: Freepik)</p></div>
(Source: Freepik)

Much has been written about recent trends in women’s employment in India. In particular, several authors have taken note of the increase in female employment rate having increased from 19% in 2017 to 29% in 2022-23, nothing in the increase in female employment points towards a distress driven entry. Mahambre points out that the increase in employment, particularly for women, has been accompanied by a fall in hours worked, especially so in the case of urban self-employed women.

Most of the increase in women’s employment rate seen in the last few years is first, largely a rural phenomenon and secondly, primarily driven by an increase in women’s share in self employment. In this piece, we unpack some of these recent dynamics to understand what is propelling this increase.

Uptick In Self-Employment

For both men and women, self employment engages nearly half the workforce. However, for women, in the early 2000s, even as female employment rate declined, the structure of employment has gradually shifted, with an increase in the share of women in regular salaried employment. In the 1980s, women in salaried employment accounted for 8.1% and those in self employment were 56%. By 2017, the share in salaried work had increased to 24%, while the share in self employment decreased to 50%. However, since 2017, what we see is a gradual uptick in self-employment and a decline in salaried work, with women in self employment increasing to 64% and salaried work falling to 19%. Figure 1 unpacks these trends, clearly showing the contraction in the share of women in salaried work. What is further interesting to note here is the change in the nature of women’s self-employment.

Self employment broadly consists of three kinds of workers. One, own account workers, that is, single person enterprises that typically do not have any hired help. A farmer working on a small plot of land or a small kirana shop owner, who does not hire workers on a regular basis, would constitute such own account workers. Second, employers, that is, owners of enterprises that hire at least one worker on a regular basis and third, unpaid family helpers, that is, family members working in family farms or businesses, who are often not explicitly remunerated. In the last six years, we have seen a subtle shift in the nature of employment.

Why Changing Structure Of Women's Employment Is Worrying

This trend is further reinforced in the quarterly trends (Figure 2)— from 2020 onwards, there is an increase in women as OAWs. Additionally, we see that this increase is seen largely in the case of agricultural work. In fact, when women are in self-employment, the major industries that occupy them are agriculture, education, retail trade, garment manufacturing and domestic work. In 2017, about 53% of the self-employed women were in agriculture. However, between 2017 and 2022, during the same time that self employment increased, the share of women in agriculture has gone up to 60% in 2022.

Why Changing Structure Of Women's Employment Is Worrying

What Caused Own Account Worker Spike?

What explains this increase in women in agricultural self employment? There are two possibilities. One, the increase in women as own account workers may be coming from an intra-household reallocation of work. Men, who were previously running family farms and enterprises may have withdrawn from this work and moved into wage work. As a result, women who were previously unpaid family workers ‘become’ own account workers, taking over the family farms/businesses, taking up the place vacated by the adult male leaving for wage work.

Although the PLFS surveys do not track the same households across multiple years, we can check if this is indeed the case, by looking at what is happening within households in the patterns of employment between men and women. Conditional on women being in own account work, what are men doing and has this changed over time? If it is indeed the case that men are leaving for wage work, then as women in OAW increases, we should also see a corresponding increase in men in wage work in the same household

Table 1 shows the distribution of adult males in those households where women are in self-employment. Indeed, we see a marginal shift of men toward wage work. But notably, in households where women are own account workers, we find that there is an increasing share of men in agricultural self-employment as well, from 17% in 2017 to 21% in 2022.

Why Changing Structure Of Women's Employment Is Worrying

Multiple OAWs In Same Households

This then brings us to the second possibility. That is, in the same household, there is now more than one ‘enterprise’ coexisting, that is, both men and women are working as OAWs. And indeed, this is confirmed when we examine the distribution of workers within households. In 2017, at least one woman in a given household would be an OAW. By 2022, this has doubled. This has happened alongside a steady increase in the number of male OAWs within a household. What does a doubling in the number of household enterprises mean? The data tells us that most of these enterprises are agricultural enterprises. It is curious that there is this multiplication of farm-based enterprises within the household. In fact, if we look at average earnings for the multiple agricultural enterprises in a household, we see that despite the increase in the number of OAW within households over the years, the average earnings of OAW have remained stagnant across quarters at around Rs 10,000 per capita. This challenges the assertion that males are moving to higher-paying jobs, as reflected by (i) the marginal share of men transitioning to wage work and (ii) the lack of earnings growth for individuals engaged in OAW.

The persistent stagnation in average earnings contradicts the notion of overall economic improvement or upward mobility. This, combined with a fall in share and earnings of salaried female workers, points towards less than favourable trends for women in the labour force. The puzzle remains as to why more and more women are engaging in agricultural work, despite a fall in their average earnings over time.

Rosa Abraham is Assistant Professor and Akshit Arora is Research Associate at Azim Premji University.

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