Rise in Self-Employed Women in India Amid Economic Struggles

A recent study from Azim Premji University in Bengaluru reveals a notable increase in female self-employment in India’s workforce. The study, part of the “State of Working 2023” report, indicates a 14-percentage-point surge in women engaging in self-employment, reaching nearly 65% between the quarter ending in June 2018 and the quarter ending in December 2022.

The report highlights the significance of understanding why more women are turning to self-employment. If this shift is due to economic growth and heightened labor demand, it would have different implications compared to a scenario where declining household incomes are driving women toward self-employment.

Despite the rise in female self-employment, earnings in this sector remained at just 85% of what they were in the quarter ending in June 2019.

India’s female labor force participation increased to just under 33% after the COVID-19 pandemic, up from 30% before the pandemic, but it remains relatively low. The gender wage gap, while narrower than in the early 2000s, still persists, with women earning 76% of what men do as of 2021-22.

Prime Minister Narendra Modi’s government has proposed reserving one-third of seats in the lower house of parliament and state assemblies for women. Government data analyzed by the university indicated that while the economy added nearly 57 million jobs in the five years leading up to June 2022, 35 million people remained unemployed.

The research also found that India’s growth has been less labor-intensive compared to the average in developing countries, suggesting that policies focused solely on GDP growth might not necessarily accelerate job creation. Youth unemployment is particularly high, with graduates in the under-25 age group experiencing unemployment rates as high as 42.3% as of June 2022, according to the report. However, unemployment rates decrease as graduates get older, dropping to 22.8% for the 25-29 age group and 9.8% for the 30-34 age group. The report underscores the importance of considering the nature of the jobs graduates find and whether they align with their skills and aspirations.

Re-reported from the article originally published in Shethepeople