It's a mystery: Women in India drop out of the workforce even as the economy grows

MUMBAI, India – Growing up in a city that's home to Bollywood, the world's biggest film industry, Aditi Dhulap dreamed of being an actor. Or maybe a flight attendant. She never thought of doing a 9-to-5 office job.

Until a family tragedy, 28 years ago, changed everything.

Dhulap's younger brother was killed in a train accident. And her father had a heart condition that threatened his ability to keep working. Suddenly, the middle-class family's financial security fell on Dhulap. She was just 21.

"My dad needed me to work as a security for my mom and myself," Dhulap, now 49, explains. "We should not be dependent or spread our hands in front of others because there was no male to support us."

So she got a job as a secretary at the Mumbai office of the German manufacturing company Siemens. Landing a job at a big foreign firm was a big deal back then — especially for a woman, she recalls. Dhulap flourished, and over the next 20 years, she climbed the ranks at Siemens – and was loving it.

She was an executive, living in a typical joint Indian family home with her in-laws and children, when in 2005, her father-in-law died. Then the family's longtime housekeeper got married and left. Suddenly, the role of caregiver fell on Dhulap.

So she did what millions of Indian women do each year: She quit her job.

As their country gets richer, Indian women are healthier, more educated – yet unemployed

India has one of the fastest-growing economies in the world. (The IMF forecasts 6.8% growth for India this year, compared to just 1.6% for the United States.) By 2030, India is forecast to be the third-largest economy in the world, behind only the U.S. and China. Millions of Indians are emerging from poverty each year.

Usually, when women work, it's a boon to any economy. Most countries develop faster with women in their workforces. That's true for India too. Throughout the 1990s and particularly in the early 2000s – decades of robust GDP growth – female labor participation grew, albeit from very low levels.

The problem is, they're still very low.

According to the latest World Bank figures, from 2021, fewer than 1 in 5 Indian women work – at least formally. (Though most work in India is informal – agricultural or domestic work – which often doesn't get counted.)

That's lower than Pakistan's female labor rate and roughly in line with Afghanistan's, before the 2021 Taliban takeover. (Even though both Pakistan and Afghanistan are substantially poorer countries, with stricter social norms and less mobility for women.)

Not only is the proportion of women in India's workforce low. It's declining.

Over nearly two decades, India's female labor participation rate looks like a steady downward curve: From 32% in 2005, to 19% in 2021 – the most recent year for which statistics are available.

As India develops, women are dropping out of its workforce – in record numbers. This is happening among rich and poor women, in urban and rural areas – across social class, religion and age groups.

In fact, it's happening even among poor rural women – who might need a paycheck the most.

Economists are stumped.

"It's the change that's created a puzzle for us. What is happening in the Indian labor market, particularly during a period of strong economic growth?" asks Sher Verick, an economist at the International Labour Organization who did a seminal 2014 study on female labor in India and has continued to track its decline.

Economists cite six factors that may help explain this economic mystery: Prosperity, education, social norms, safety concerns, problems with statistical measurement and a lack of decent and productive employment.

Factor #1: Prosperity means women don't have to work

As household incomes rise, women are dropping out of India's workforce simply because they can afford to. Many no longer have to do back-breaking tasks in agriculture or other manual labor.

"As the economy grows, women retreat from work, in part because women's work is seen as a standby or emergency measure," says A.L. Sharada, a sociologist, demographer and director of Population First, a social welfare group based in Mumbai. "The moment the family becomes economically stable, they expect the woman to get out of the labor force."

So women move in and out of employment, depending on their family's needs. That was the case for Dhulap, who went to work at Siemens when her family experienced financial stress and then quit her job once her family amassed savings.

That's the case for many lower-income folks too. Ibrahim Naikodi, an auto rickshaw driver in Mumbai, says it was only when inflation spiked this autumn that he and his wife discussed the possibility of her working outside the home.

"With food prices going up, we're struggling to pay the kids' school fees," Naikodi explains. "There's no way we can survive on a single income right now."

Factor #2: Pursuing an education takes women out of the workforce

Today's Indian women are more literate and educated than ever before. They're enrolling in schools and colleges in greater numbers and staying in school longer than previous generations did.

But that hasn't translated into jobs – at least not statistically.

Time spent at school or university is counted as time spent outside of paid work. "Of course we recognize this as an important and positive trend," says Verick, the ILO economist. "It does automatically lead to a reduction of the labor force for the age group that's in school."

But the pursuit of education alone can't solve the mystery. It skews the work force data mostly just for women in their teens and early twenties.

"It doesn't explain what's happening across all age groups," Verick says.

Factor #3: A common belief that women should not work outside the home

Despite their country's fast development, lots of Indians still have conservative ideas about a woman's role in the family.

"Family is the first priority for many women across the world, but especially in a country like India that's very traditional. We still live in joint [multi-generational] families with obligations and a glorified image of women as mothers sacrificing, caring and nurturing," says Sharada, the sociologist. "The other aspects of a woman – as a competitor or achiever with aspirations — are not given much importance."

That was the case with Dhulap. When obligations mounted, her family encouraged her to stay home – prioritizing unpaid household labor over her profession.

"As a married woman, when you're staying in a [joint] family, you are not able to keep everybody happy," Dhulap recalls." My mother, she was not supportive at that time. My mother-in-law was not supportive."

Factor #4: Migration has left women with safety concerns

A massive wave of migration out of India's countryside may also have unintended consequences for women. Often it's a solo male worker who migrates first, leaving women and children in their ancestral village – where the wife effectively becomes a single parent. She has less flexibility to seek paid work outside the home.

When women do migrate to urban areas, they often have safety concerns. They may not know their neighbors as well as they did in their ancestral villages. And if they get jobs, they may have to commute long distances, or at night – on public transit that's often unreliable and unsafe.

In 2012, the fatal gang rape of a medical trainee on a New Delhi bus jolted Indians into panic over sexual violence. Afterward, an international poll of experts on women's issues ranked India as the most dangerous country in the world for women. It was based on perceptions, rather than crime data, and the Indian government pushed back at it. But it nevertheless reinforced the idea that women need to be protected.

"Social norms act as a constraint. In rural areas, the ability to work outside the home is hard because you may have to travel longer distances, and public transit isn't there," the ILO's Verick says. "But then in urban areas, there can be safety concerns about taking those rides, and some families decide it's ultimately not worth taking the risk."

Urban infrastructure hasn't kept pace with this inflow of migrants. Startups and the gig economy have filled the gap, but those carry risks for women too, says economist Ritu Dewan, the first female director of the economics department at the University of Mumbai.

"Violence against women is exacerbated by privatization. Take Uber, for example! It's not an affordable option for a majority of workers," Dewan says. "But then for women, even if they can afford it, it's risky because the driver is someone you've never seen in your life."

Factor #5: It's difficult to measure female labor in the first place

When statistics show India's female labor rate around 20%, it doesn't mean 80% of women aren't working.

Women do a lot of unpaid work – running a household, or planting and harvesting on a family farm – that doesn't get counted. Often it's because workers – including women themselves — might not realize these types of labor should even be classified as such.

"There are also income-saving activities that women do — collecting fuel and firewood, for example," Dewan says. "So you may not earn an income, but you're replacing the lack of income with your economic activities – which are generally not counted as work."

Factor #6: India lacks jobs that are appropriate and accessible for women

In an alleyway off a noisy market in a northern Mumbai suburb, Sangeeta Ashok Devde and her neighbors commiserate about their employers. They all work as cleaners and cooks in other people's homes. It's sporadic, insecure work.

"None of us get decent wages or paid time off," says Devde, who estimates she's around 45 years old. "But as women we have our own houses to take care of too. My body is just worn out as a result of working for so long in other people's homes as well as my own."

Some of her friends have dropped out of domestic work. It's too grueling. But they're uneducated and unable to find much else.

"This is an issue about the ability – or lack thereof — of an economy to create decent, productive employment that's appropriate and accessible for women," says Verick, from the ILO. "It's the key factor."

This is what's lacking especially for unskilled women like Devde and her neighbors, who shoulder the bulk of childcare and household duties, or for those who live in rural areas. In other words, a majority of women in India.

Weak labor laws don't help. India has no national minimum wage or law governing overtime.

"There's no overtime, there are often no breaks, you're on call 24 hours. But they feel lucky to be employed," laments economist Dewan. "With this huge gender gap and huge competition for jobs, women are bound to drop out, because they're often seen as secondary earners."

That's not the case for Devde though. She's separated from her husband and trying to support their son on her own. To do so, she works a patchwork of jobs, cleaning and cooking for several employers. But one of them recently replaced her with a younger man, who doesn't have to juggle unpaid work at home as she does.

So what now?

India has about 1.4 billion people – and counting. This year, the United Nations forecasts it'll overtake China as the world's most populous country.

And India's population skews young. It's got the largest number of working-age people anywhere in the world. That's what economists call India's "demographic dividend" – a concentration of young people who, if gainfully employed, can help fuel India's growth for decades to come.

But quick development and a large population also bring challenges: smog, inadequate infrastructure, economic inequality – and unemployment.

So this may be one of India's biggest challenges, as its population grows: Not only to create jobs for all of its workers. But to create the conditions that'll allow its female workers to take them.

"You cannot sustain progress unless you take women along with you," says Sharada, the demographer. "Because they constitute 49% of our population. You cannot ignore them."