Easing Regulatory Constraints: A Panacea to Female Labour Force Participation Rate?
Updated: Nov 3, 2020
Protective legislation for females, with their stereotyped perceptions, are inhibiting their labour force participation rates. They must be revamped.
The female labour force participation rate (FLPR) in India has continued to decline over the last few years despite robust economic growth, rising incomes, and improvement in gender outcomes across a range of dimensions. The estimates from the NSSO reveal that between 1993-94 and 2011-12, the FLPR (usual status approach1) has declined from 42.6 percent to 31.2 percent for ages 15 and above (Andrès et al, 2017). The data from the Labour Bureau suggests that the FLPR languished to about 27.4 percent (usual status; ages 15 and above) in 2015-16. The recently leaked reports2 of the Periodic Labour Force Survey place the FLPR at an all-time low of 23.3 percent (usual status; ages 15 and above) in 2017-18. Further, the Global Gender Gap Report by the World Economic Forum which benchmarks 149 countries on their progress towards gender parity placed India at the 108th position in 2018; unchanged from 2017 but a slip of 21 slots from 2016. Across the economic participation and opportunities pillar, India was ranked abysmally low at 142 out of 149 countries (only better placed that Iran, Jordan, Saudi Arabia, Pakistan, Yemen, Syria and Iraq). All of these statistics indicate that India has much ground to cover in terms of economic inequality if the 5th SDG i.e. ‘eliminating gender inequalities’ is to be achieved by 2030.
There are a large number of demand and supply-side factors such as increasing enrolment of women in higher education, income effects of households, lack of job opportunities deemed suitable by women, crowding out effect due to higher educational outcomes and discriminatory wages that have been examined in literature as factors that might possibly explain the low FLPR in India. Some have even cited the problem with the Indian System of National Accounts (SNA)2 that lumps women performing certain non-marketed economic activities as out of the labour force resulting in underestimation of women’s work (Kapsos et al 2014; Hirway, 2012 and Mehrotra et al, 2017). Alternatively, a growing body of research suggests that social norms that put a premium on women seclusion could also explain the low FLPR in India (Fletcher et al, 2017; Rustagi, 2010). Concomitantly, another perspective to the existing literature on FLPR is that discriminatory labour law or ‘protective legislation’ that place unreasonable restrictions on women’s work continue to have an adverse impact on FLPR (Abraham et al, 2013; Fletcher et al, 2017).
Historically, ‘protective legislation’ at both the central and state level has limited the employment of women workers by imposing restrictions on the type and conditions of work, and thereby, resulting in increased cost of employing women. Some of these laws and regulations have been identified below (Table 1). For instance, prohibiting women workers from working at night has resulted in decreased hiring of women by employers for “it means adding more people to the muster rolls as one entire shift of workers becomes unavailable for work (Abraham et al, 2013).” ILO (2001) contends that historically, across the world, when night work prohibitions took effect, many women lost their jobs because they were no longer able to work on rotating shifts and were assigned jobs that did not require night work. These jobs became ‘female’ jobs and increased the extent of occupational sex segregation. This is perhaps one of the reasons for underrepresentation of women in capital intensive industries where night work is indispensable due to both technical and economic reasons. For instance, in industries such as oil refining, steel and paper, the production process itself demands that it is continuous and it is impossible to cease production process for a 12 hour period (ILO, 2001). Further, the more capital-intensive the industry is, the more costly it is to have expensive equipment lie idle which necessitates the need for night shifts (ibid).
Table 1: Protective Legislation in India
Regulatory constraints not only result in decreased employment of women in certain sectors, but they also jeopardize women workers right to equal opportunity and employment by unreasonably classifying them into highly ‘vulnerable category’ not at par with men (ibid). Even though guidelines for safety for male and female workers is essential and must be evolved, a blanket ban on women’s engagement in certain processes is discriminatory and often has unintended consequences (ibid). For instance, up until February 2019, there was a blanket ban on employment of women in underground mines that kept them away from the technical aspects of the mining industry and resulted in low female employment in the mining sector. It also pushed women to be employed as unorganized and often illegal workers with dismal conditions of work. Responding to the representation from several women employee groups and industry, the central government eased some of these restrictions in February 2019 in a bid to boost female employment in the mining sector. Further, whilst discussing the sectoral impact of protective regulations, it is also worth mentioning that labour laws do not confer the same protection to women employees in agriculture as to women employees in industries (Andiappan, 1979) and today agriculture, continues to remain the biggest employer of women.
With respect to shops and establishments, in 2016, the central government took measures to address the issue of the right of women to night work. It passed the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Act, with the objective of improving the working conditions of workers, boosting female employment and creating favourable environment for doing business. In shops and establishments employing ten or more workers (except manufacturing units), women will be permitted to work during night shifts provided there is adequate provision of shelter, restroom, creches, ladies toilet, transportation and protection of dignity. The law also provides against discrimination of women in matter of recruitment, training, transfer or promotions. The states have the flexibility to change it as per their needs. The Union Cabinet approved the Model Shops and Establishment (Regulation of Employment and Conditions of Service) Bill, 2016 in June 2016 and the state governments were left free to adopt the act in its existing form or after modifying it as per their requirements. However, the response to the bill has been rather lukewarm with only Gujarat, Maharashtra and Kerala have taken steps to adopt the model legislation. The Centre must press upon the states to adopt the model legislation to ease the constraints on women workers.
Presently, diluting protective legislation as a policy tool to increase female labour force participation rarely figures in popular policy discourse. This is because there is a lack of credible empirical research which links protective legislation to poor labour market outcomes for women. This warrants the attention of researchers as well as policy makers alike. Today, with developments in technology, old possibilities and perceptions that set up old legislations have ceased to exist and inhibit (Second National Commission on Labour, 2002). The challenge is to create sound consensual policies that strike a balance between measures which give women increased freedom of choice regarding work and measures that aim at their protection.
Abraham, Vinoj (2013), ‘Missing Labour or Consistent De-Feminisation?’, Economic & Political Weekly, Vol. 48, No. 31.
Andiappan, P (1979), ‘Public Policy and Sex Discrimination in Employment in India’, Indian Journal of Industrial Relations, vol. 14, no. 3, pp. 395–415.
Andres, LA, B Dasgupta, G Joseph, V Abraham and MC Correia (2017), ‘Precarious drop: Reassessing Patterns of Female Labor Force Participation in India’, World Bank Policy Research Working Paper 8024.Business Standard (2019), ‘More than half of India’s working age population out of labour force: NSSO’, 4 February 2019.
Ghai, Surbhi (2018), ‘The Anomaly of Women’s Work and Education in India’, ICRIER (Indian Council for Research on International Economic Relations) Working Paper 368
Hirway, Indira (2012), ‘Missing Labor Force: An Explanation.’ Economic and Political Weekly,Vol. 57, No. 37, pp 67-72.
International Labour Organization (2001), ‘Chapter 1-The context: Female Labour, night work and global industrialization’, Report of the Committee of Experts.
Kapsos, Steven; Silberman, Andrea and Evangelia, Bourmpoula (2014), ‘Why is female labour force participation declining so sharply in India?’ ILO Research Paper No. 10.
Klasen, S and J Pieters (2013), ‘What Explains the Stagnation of Female Labour Force Participation in Urban India?’, IZA DP No. 7597
Labour Bureau (2016), ‘Report on Fifth Annual Employment-Unemployment Survey (2015-16)’, Vol. I, Ministry of Labour and Employment.
Mehrotra, Santosh (2017), ‘Explaining Falling Female Employment during a High Growth Period.’ Economic & Political Weekly, Vol. 52, No. 39.
Rustagi, Preet (2010), ‘Changing Patterns of Labour Force Participation and Employment of Women in India,’ The Indian Journal of Labor Economics.
The Second National Commission on Labour (2002), ‘The Report’, Government of India.
The World Economic Forum (2018), ‘The Global Gender Gap Index.’
 The usual status (ps+ss) approach takes into consideration both the major time criterion (183 days or more in an economic activity) and a shorter time period (30 days or more in an economic activity). It is a more inclusive indicator for measuring labour force participation rate. Thus a person who has worked even for 30 days or more in any economic activity during the reference period of last twelve months is considered as employed under this approach.
 However, the deployment of women in underground mines is still prohibited except in technical, supervisory and management roles along with the restriction on their work at night between the hours of 7 pm and 6 am. Further, women can now be deployed at night between the hours of 7 pm and 6 am in a mine above ground including opencast mines subject to the condition that the deployment of women shall be in a group of not less than three in a shift.
This article was originally published on the Law School Policy Review, dated May 21, 2019.