Why women in India are dropping out of the workforce: Farzana Afridi and Kanika Mahajan on their research on gender and labor markets

Voices in Development: Why women in India are dropping out of the workforce • Transcript

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Although women around the world have joined the labor market in rising numbers over the past several decades, the percentage of women in the labor force in India has declined, even while their education levels have risen and the country has experienced rapid economic growth. 

In this episode of Voices in Development, Farzana Afridi, a professor of Economics at the Indian Statistical Institute in Delhi, and Kanika Mahajan, Associate Professor of Economics at Ashoka University in Sonepat, India, discuss their research collaborations on women and work, the benefits and risks of digital platforms for women in India, and how researchers can influence policy. 

Afridi and Mahajan recently participated in the Economic Growth Center’s Kuznets Visitors Program, which brings short-term visitors from around the world to the Yale campus to contribute to the development economics community. 

As a graduate student, Afridi became interested in studying how government programs could take household behavior into account, including the ways that income determines household decision making.

"You want to look at the black box of what is happening within the household, and then see how that interacts with the outside world to determine, ultimately, the impacts of government policies." – Farzana Afridi

Mahajan’s interest in gender developed early in graduate school, when she visited agricultural regions of India, and observed how men and women expressed such different concerns related to the labor market. 

With their similar interests and complementary skills, Afridi and Mahajan began to collaborate on research examining women’s declining labor force participation in India. “It’s been such a huge puzzle,” said Afridi. “Unlike the developed countries, where you see declines in fertility rates, you see increases in women’s educational attainment, gender gaps in educational attainment declining. Typically women would increase their labor force participation. You would see more engagement with paid outside work. But in India, the opposite was happening.” 

They sought to understand how much of this decline over the last few decades was driven by the supply side, like social norms preventing women from seeking work outside of the home, and the demand side, such as a lack of jobs that were available or appealing to women.

Afridi and Mahajan suspected that the reasons for women’s declining labor force participation went beyond gender norms or other social constraints. 

“When your educational attainment goes up, your productivity increases,” Afridi said. “So you’re going to be more productive in the labor market, because you know, you're just more knowledgeable, you can do things much more efficiently and so on, which also means that you can be more efficient within the home.” Women might conclude that investing their educational gains into supporting their children might ultimately bring greater returns than whatever income they might derive from work outside the home.

"It is possible that women are just not finding the kinds of jobs which will give them higher returns. And so it obviously makes economic sense for them to just stay back at home. Because the returns in terms of investing in the children's human capital, their education and their health – when these kids grow up, they're going to work in the labor market – all the educational attainment is going to feed back into the family. So it makes more sense for me to stay because I just don't have the good enough returns that I see in the labor market." – Farzana Afridi

Their research suggested that supply side factors, such as women’s lack of education, explained women’s low workforce participation in the 1990s. However, the persistence of low workforce participation levels during the 2000s, despite women’s rising educational attainment, indicated the significant role of demand-side factors, especially in rural India and the agricultural sector.

Agriculture in India underwent a lot of mechanization, especially for tilling the land, in the mid 90s, Mahajan said. She and Afridi found that 70 to 75% of the decline of women’s labor force participation in that decade could be explained by mechanization. Tilling reduces the growth of weeds, and because weeding is primarily done by women, the mechanization of tilling meant fewer jobs for women, Mahajan said. 

Mahajan and Afridi are both based in India, and find that being from the country they are studying has many advantages. “It gives you a pulse of the problem as people around you are perceiving it,” Mahajan said. But they also value the perspectives of development scholars based outside of India, who are well positioned “to place the problem in a bigger economic context.”

A recent focus of their research is women’s work and digital technology. While some hail digital technology as a tool for women’s economic empowerment, Afridi, who is leading a digital platforms and women’s economic empowerment program supported by the Gates Foundation, cautions that digital labor platforms can replicate inequalities if not approached thoughtfully. As Afridi points out, “knowing how to navigate the digital world is as important as that world existing.” In India, women’s smartphone ownership and usage is very low compared to men’s, a trend that begins in adolescence. 

"A lot of times, these digital platforms end up replicating the kind of gender gaps that we see in traditional markets. So technology will not be a solution to all your problems. It can perhaps help you mitigate some of them, but it can also create more of them." – Kanika Mahajan

Afridi and Mahajan agree that ultimately, their work gains its power through its translation to policy. That is most likely to happen when development researchers communicate their work to policymakers in ways that non-specialists can understand.

Farzana Afridi is Professor of Economics at the Indian Statistical Institute in Delhi, Visiting Professor at the Munk School of Global Affairs & Public Policy at the University of Toronto, and Research Fellow at the Institute of Labor Economics in Bonn. Her research focuses on the intersection of development and labor economics, covering three broad themes: gender and social identity, human capital, and governance.

Kanika Mahajan is Associate Professor of Economics at Ashoka University in Sonepat, India. Her research focuses on issues around stagnation of women's labor force participation in India, exploring both the supply side and the demand side linkages using data from digital platforms as well as secondary household and firm data. Her other ongoing research examines growth and resilience of firms in India and its implications for labor, capital and trade.