Empowering women to join the workforce is the easiest way to increase economic growth

26 Aug 2023

Empowering women to join the workforce is an obvious way to increase our economic growth. Our female labor force participation rate is among the lowest in the world. One thing I couldn’t make sense of is why our female labor force participation (FLFP), which was in the ~30% range in the 90s, fell to 20% and rose to 24%. We have been discussing this topic on the Rainmatter Grove and and Ashutosh from IndiaDataHub shared something interesting:

“The relationship between female labour participation and per capita GDP tends to be U-shaped. This is because at lower income levels, a large part of female employment (and the same holds for children) tends to be distress or need-driven. As income levels rise, this distress employment reduces, and thus female labour participation declines. And then it rises as women enter the labour force again, not due to distress, but voluntarily.”

Check the images, the U shape (of course, with exceptions) and the FLFP % dip from the 90’s.

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