Cities of opportunity, women on the margins: What urban labour markets reveal about women’s work

Cities are at the heart of India’s economic transformation, serving as centres of growth, employment creation, and opportunity. As India’s cities expand, a key question is whether their growing labour markets are creating pathways for women to participate and benefit equally. Using estimates from the 2025 Periodic Labour Force Survey (PLFS), this article examines gender differences in labour market outcomes among persons aged 21-59 years across three urban categories. The top 5 cities are defined on the basis of urban agglomeration population in the 2011 Census, namely Greater Mumbai, Delhi, Kolkata, Chennai, and Bengaluru. The second category comprises the other million-plus cities, defined as urban agglomerations with a population of one million or more according to the 2011 Census, excluding the five largest cities. The third category consists of the remaining urban areas with populations below one million. This article builds on the author’s previous work on gender and urban labour markets by adopting a more disaggregated urban classification, enabling a closer examination of labour market outcomes across different levels of urbanisation.

The analysis is restricted to individuals aged 21-59 years rather than the conventional working-age population (15-59 years). This reduces the influence of educational enrolment on labour market indicators, particularly in urban areas where a larger share of young adults, especially women, are enrolled in higher education. Among women aged 15-24 years, 54.1 percent in urban areas were in formal or non-formal education and training, compared with 40.9 percent in rural areas (NSSO, Multiple Indicator Survey, NSS 78th Round, 2020-21).  In addition, the female Gross Enrolment Ratio (GER) in higher education reached 31.2 percent in 2023-24, exceeding the male GER of 28.9 percent (AISHE 2023-24, Ministry of Education, Government of India). Restricting the analysis to those aged 21-59 years therefore allows for a clearer comparison of labour market outcomes across urban areas by minimising differences arising from educational enrolment.

PLFS measures labour market activity over different reference periods to capture the changing nature of work. One such measure is the Current Weekly Status (CWS) approach, which classifies individuals according to their labour market activity during the seven days preceding the survey. Under this approach, a person is classified as employed if they worked during the reference week, unemployed if they did not work but were seeking or available for work, and out of the labour force otherwise. Unless otherwise stated, all estimates in this article are based on the CWS approach. The analysis of average monthly earnings, however, is based on the Current Daily Status (CDS) approach, which records an individual’s labour market activity separately for each day of the reference week. Both the CWS and CDS approaches use a seven-day reference period, unlike the 365-day Usual Status approach commonly used for India’s headline employment and unemployment estimates. Differences between these estimates and headline national figures reflect the use of different reference periods.

Across urban India, men’s labour force participation exceeds 90 percent, while only three in ten women participate in the labour force

Figure 1 presents the labour force participation rate (LFPR) and workforce participation rate (WPR) for persons aged 21-59 years. The LFPR measures the proportion of the population that is either employed or actively seeking work, while the WPR measures the proportion that is employed. Figure 1 shows that men’s labour market engagement is high across all three urban categories, with the LFPR remaining around 93 percent and the WPR around 88 percent. In contrast, only about three in ten women participate in the labour force across all three urban categories, with slightly fewer in employment. Both female LFPR and WPR are highest in the remaining urban areas. Female LFPR declines from 33.4 percent in the remaining urban areas to 31.4 percent in the other million-plus cities and 31 percent in the top five cities. Female WPR is highest in the remaining urban areas (30.5 percent), followed by the top five cities (29.3 percent), and lowest in the other million-plus cities (28.3 percent). Across all three urban categories, the gap between women’s LFPR and WPR is relatively small, indicating that unemployment accounts for only a small share of the difference between labour force participation and employment. However, the unemployment rate may understate labour market challenges, as individuals who become discouraged and stop looking for work are classified as being out of the labour force rather than unemployed.

Regular salaried work predominates among women across urban areas

The PLFS classifies employed persons into three broad employment types: salaried/wage employment, self-employment, and casual labour. Salaried/wage employees are those who work in another person’s enterprise or organisation and receive, in return, a salary or wage on a regular basis. Self-employed persons operate their own enterprise, trade, business, or profession. This category includes own-account workers, employers, and unpaid family workers. Casual labourers work for wages on a daily or short-term basis without a regular or continuing employment relationship.

Among employed women aged 21-59 years, Figure 2 shows that regular salaried employment is the predominant form of employment across all three urban categories. Its share is highest in the top five cities, where over three in four employed women (77 percent) are in regular salaried or wage employment, compared with 64.2 percent in the other million-plus cities and 50.1 percent in the remaining urban areas. In contrast, self-employment is relatively more common outside the largest cities, rising from 21.1 percent in the top five cities to 32.2 percent in the other million-plus cities and 40.6 percent in the remaining urban areas. Casual employment constitutes a relatively small component of women’s employment in all three urban categories, with the highest share observed in the remaining urban areas (9.3 percent).

The predominance of salaried/wage employment among women reflects the fact that employment decisions are shaped not only by wages but also by the quality of work. Compared with self-employment and casual work, salaried/wage jobs are more likely to offer predictable working hours, formal contracts, paid leave, workplace safety, and, in some cases, support such as childcare and transport. These features make salaried/wage employment a more attractive option for many women. This is consistent with a broader body of evidence showing that the expansion of white-collar employment is associated with higher female labour force participation, as these jobs tend to offer stronger economic returns alongside working conditions that are more socially acceptable. CEDA’s earlier analysis similarly finds that larger firms employ a greater share of women, plausibly because they are better positioned to provide workplace benefits such as paid leave, maternity benefits, and transport facilities.

More than one-in-three working-age women in top five cities are college educated

Figure 3 shows that educational attainment among the population aged 21-59 years is highest in the top five cities for both men and women. College attainment is highest in the top five cities, where 36.7 percent of women and 38.6 percent of men have a college degree or higher. The corresponding shares decline to 33.2 percent for women and 37.9 percent for men in the other million-plus cities, and further to 28.2 percent and 33 percent, respectively, in the remaining urban areas. At the other end of the educational spectrum, women are more likely than men to have not completed Class 8 across all three urban categories. The share of women with less than a Class 8 education falls from 31 percent in the remaining urban areas to 27.6 percent in the other million-plus cities and 23.3 percent in the top five cities, while the corresponding shares for men are 21.7 percent, 18.4 percent, and 16.6 percent.

The top five cities combine the highest earnings with the narrowest gender earnings gap

Figure 4 presents average monthly earnings from regular salaried or wage employment among persons aged 21-59 years. Average monthly earnings are highest in the top five cities for both women and men. However, women earn less than men across all three urban categories. The gender gap is narrowest in the top five cities, where women earn 16.9 percent less than men (₹28,860 compared with ₹34,728, respectively). The gap is widest in the other million-plus cities, where women’s earnings are 27.8 percent lower (₹21,380 versus ₹29,624, respectively). In the remaining urban areas, women earn 22.1 percent less than men (₹21,358 versus ₹27,416, respectively).

Women face higher unemployment across urban India, particularly among youth

The unemployment rate measures the share of the labour force that is unemployed but actively seeking or available for work. While the overall unemployment rate is estimated for the labour force aged 21-59 years, the youth unemployment rate is estimated for those aged 21-30 years. Figure 5 shows that unemployment is higher among women than men across all three urban categories. Among the overall labour force (aged 21-59 years), unemployment is lowest in the top five cities for both men (4.2 percent) and women (5.7 percent). In contrast, the other million-plus cities record the highest unemployment rates, at 6.2 percent for men and 10.1 percent for women.

Across all three urban categories, youth unemployment exceeds overall unemployment, with more pronounced gender disparities among young workers. The gender gap is widest in the remaining urban areas, where the youth unemployment rate for women (25.1 percent) exceeds that for men (14 percent) by 11.1 percentage points. The corresponding gaps are 9.1 percentage points in the other million-plus cities (22.9 percent versus 13.8 percent, respectively) and 3.8 percentage points in the top five cities (13.1 percent versus 9.3 percent, respectively).

The findings highlight that urbanisation alone does not automatically translate into better labour market outcomes for women. While the top five cities perform better in terms of lower gender gaps in unemployment rate, they do not fare any better in gender gaps in employment. This is because women’s ability to participate in paid work is shaped not only by the availability of jobs but also by whether those opportunities are accessible. Accessibility is mediated by mobility, safety, and unpaid care responsibilities. Research shows that women often have smaller job-search geographies than men and are more likely to seek employment closer to home, even when such jobs offer lower wages. In Indian cities, limited transport options, safety concerns, and unequal care responsibilities further narrow these opportunities. Improving women’s labour market outcomes therefore requires more than expanding employment opportunities; it also requires creating environments that enable women to access and sustain paid work through safer transport, better last-mile connectivity, accessible childcare, and supportive workplace practices.