Job Opportunities Along the Rural-Urban Gradation and Female Labor Force Participation in India

39 Pages Posted: 20 Apr 2016

See all articles by Urmila Chatterjee

Urmila Chatterjee

World Bank

Rinku Murgai

World Bank - Development Research Group (DECRG)

Martin Rama

World Bank

Date Written: September 15, 2015

Abstract

The recent decline in India?s rural female labor force participation is generally attributed to higher rural incomes in a patriarchal society. Together with the growing share of the urban population, where female participation rates are lower, this alleged income effect does not bode well for the empowerment of women as India develops. This paper argues that a traditional supply-side interpretation is insufficient to account for the decline in female participation rates, and the transformation of the demand for labor at local levels needs to be taken into account as well. A salient trait of this period is the collapse in the number of farming jobs without a parallel emergence of other employment opportunities considered suitable for women. The paper develops a novel approach to capture the structure of employment at the village or town level, and allow for differences along six ranks in the rural-urban gradation. It also considers the possible misclassification of urban areas as rural, as a result of household surveys lagging behind India?s rapid urbanization process. The results show that the place of residence along the rural-urban gradation loses relevance as an explanation of female labor force participation once local job opportunities are taken into account. Robustness checks confirm that the main findings hold even when taking into account the possibility of spurious correlation and endogeneity. They also hold under alternative definitions of labor force participation and when sub-samples of women are considered. Simulations suggest that for India to reverse the decline in female labor force participation rates it needs to boost job creation.

Keywords: Social Development & Poverty

Suggested Citation

Chatterjee, Urmila and Murgai, Rinku and Rama, Martin, Job Opportunities Along the Rural-Urban Gradation and Female Labor Force Participation in India (September 15, 2015). World Bank Policy Research Working Paper No. 7412. Available at SSRN: https://ssrn.com/abstract=2661138

Urmila Chatterjee (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Rinku Murgai

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Martin Rama

World Bank ( email )

1818 H. Street, N.W.
Washington, DC 20433
United States

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