National Council of Applied Economic Research
Opinion: Nijara Deka and Palash Baruah.
To maximise India’s youth-driven economic potential, it must boost women’s participation in labour force
The often-quoted expression “demographic dividend” connotes the potential economic growth that can result from shifts in a population’s age structure. It implies the economic benefits resulting from a larger share of the working-age population.
Changes in a country’s population age structure can significantly have a positive effect on its economic performance, provided there is adequate and sufficient investment in human capital to leverage the productivity associated with it.
According to the Economic Survey of 2018–19, the share of India’s young population (below 19 years) has already started declining and is projected to drop from a high of 41per cent in 2011 to 25 per cent by 2041. Thus, the prospective demographic dividend will peak around 2041, with the share of the working-age population (20–59 years) expected to reach 59 per cent. This is expected to boost economic productivity, which occurs when people in the workforce are relatively outnumbered by dependents.
Women now constitute almost half of the country’s population. A similar trend is observed in the working-age population, reflecting an equal gender proportion in the working-age population. However, everything is not smooth sailing on the employment front.
Economic participation among women
Considering all economic activities, the share of young women (15–29 age group) in economic activity (Worker Population Ratio) was only about 19 per cent, while it was almost three times higher at 54 per cent for young men in 2022.
WPR is defined as the percentage of employed persons in the population. It is no different among the adult working population. Only 38 per cent of women (30-59 age group) are engaged in any economic activity, while it was 86 per cent for men.
It also revealed that about a quarter of adult women are engaged in domestic duties, while it is a meagre 0.6 per cent for men. As one understands, domestic duties, especially in one’s own household, are unpaid work. Thus, not only do women participate less in economic activities, but it is also unpaid for a quarter of those employed.
A similar trend was observed in the labour force participation rate (LFPR), which is defined as the percentage of the population in the labour force (i.e., working, seeking, or available for work) in the population. Women in the age group of 15–29 show an LFPR of 22 per cent as compared to their male counterpart at 61per cent.
It cannot even be argued that the lower LFPR among young women could be due to their involvement in education activities or skill upgrading, as no similar trend is observed among young men. Further, LFPR for women in the age group of 30-59 was at 39 per cent as compared to 86 per cent for men in the same age group.
Thus, WPR and LFPR for men in the age group of 15–29 years is almost three times that of women in the same age group, and it is more than twice in the age group of 30-59 years. The stark disparity is too obvious to ignore. This deep-rooted gender disparity will not only result in the under-utilisation of human capital but also paint an unreliable picture of employment.
Seizing the opportunity
It is without doubt that women are the most “underutilised asset” in the country. The optimal “demographic dividend” would heavily depend on their participation in productive and gainful economic activity. With women constituting almost half the population, their participation in economic activity will not only stimulate various economic activities leading to increased personal and household income but also push consumption levels.
The multiplier effect will lead to overall enhanced economic prosperity. To this end, it is necessary to create an environment that supports women’s education, especially higher and technical education, skills and capacity building, and upgradation. Both the government and private sector should be called upon to work on a road map.
The country’s economic growth would be greatly boosted if the transformative potential of the working-age population, including women, was properly harnessed and tapped. It is also aligned with the Sustainable Development Goals (SDGs) of Quality Education (Goal 4), Gender Equality (Goal 5), Decent Work and Economic Growth (Goal 8), and Reduced Inequalities (Goal 10). This should be one of the visions for “Viksit Bharat 2047.”
We owe it to the women of this country.
Nijara Deka and Palash Baruah are associate fellows at the National Council of Applied Economic Research (NCAER), New Delhi