Too good to be true? Steadily rising female labour force participation rates in India

Since 2017-18, data from the annual Periodic Labour Force Surveys (PLFS) has shown a steady increase in India’s labour force participation rate (LFPR), rising from 51.5 percent in 2017-18 to 60.5 percent in 2023-24 (for the working age population and by current weekly status). This upward trend is primarily driven by a significant rise in the Female LFPR (FLFPR). Both rural and urban FLFPRs have grown during this period, but the most striking increase has been in rural areas, where the FLFPR has nearly doubled, jumping from 23.5 percent to 42.8 percent (Figure 1).

This steady and impressive rise has reversed a nearly two-decade-long decline in FLFPR, a trend that had attracted considerable academic and policy attention. The mainstream view attributed the decline to deeply entrenched patriarchal gender norms, though some, including myself, have questioned this unilateral explanation.

The reversal is puzzling. At CEDA, we were among the first to analyze the dynamics behind this uptick in an earlier piece (see here and here).

The official narrative surrounding the rise is overwhelmingly positive, framing it as a “transformative economic shift” that represents inclusivity and opportunity. This celebratory tone is echoed in commentaries that highlight the “significant growth in female LFPR across India, especially in rural areas,” asserting that it represents the “culmination of efforts toward women-led development.” Some even dismiss the idea that the rise is driven by economic distress or the better measurement of unpaid work, instead framing it as a genuine increase in women’s economic participation, particularly in rural India. However, alongside this enthusiasm, there is growing skepticism about the accuracy of the rising figures. Academic conferences have seen spirited debates questioning the sudden reversal of a trend that had previously drawn global concern, which is reflected in some recent articles. However, in a clear and succinct analysis, Aloke Kar and P.C. Mohanan show that the increase in numbers is not due to changes in questionnaire design or definition of work. They show that female workforce has grown by about 98 million during the seven-year period (2017-18 to 2023-24), of which 80 percent is accounted for by rural women. Moreover, they show that close to half of the growth in both rural and urban women workforce has occurred in the last two (post the Covid-19) years.

Against this backdrop, this article addresses two central questions:

A) Is the PLFS portrayal of a steady rise in FLFPRs too good to be true? To assess this, the analysis triangulates data from four other sources: two surveys—the Consumer Pyramids Household Survey (CPHS), Annual Survey of Unincorporated Sector Enterprises (ASUSE) —and administrative data from two sources: the Employees’ Provident Fund Organisation (EPFO) and annual reports of the Ministry of Micro, Small, and Medium Enterprises (MSME). Given variations in definitions, measurement methods, survey designs, and sample sizes, the exact estimates may differ across these, and the article focuses on comparing trends rather than on absolute numbers.

B) If the PLFS trend holds, what does the nature of increased female LFPRs reveal?CEDA has previously discussed this in its earlier analyses (here and here), but we revisit these questions with the latest data.

Do all data sets show rising proportion of women in the labour force?

1. Consumer Pyramids Household Survey (CPHS) data

The CPHS, conducted by the Centre for Monitoring Indian Economy (CMIE), is a high-frequency, longitudinal survey that covers approximately 174,405 households three times a year. Each wave collects data on employment status based on daily activity, asking respondents whether they were employed on the day of the survey or, if unclear, the previous day. This differs from the PLFS, which uses a broader definition, reporting data based on current weekly and usual status, making direct comparisons of absolute numbers challenging. Also, the sampling frame of CPHS, i.e., the population of interest from which the sample is drawn, is different from that of PLFS, which implies that the absolute levels are not comparable across the two surveys.

CPHS started collecting data on employment status in 2016. Using the time period corresponding to the period of rise in PLFS data, Figure 2 shows employment rates from the first wave of 2021 to the last wave of 2024 separately for rural and urban areas for men. This shows a declining trend in proportion of men employed between 2017-2019, and a sharp dip in 2020 during the Covid-19 induced lockdown. Male employment recovered in 2021 but stayed roughly constant thereafter, until the rise throughout 2024.

Figure 3 shows the trends for women over the same period as the PLFS surveys. We notice a rising trend in female employment from 2021 onwards, with some fluctuations across waves. The rise is sharper in urban India; however, urban employment also started from a lower level.

While the levels differ, the trend in CPHS data broadly aligns with that of the PLFS. PLFS data show a clear rise in female LFPR starting in 2021, a trend mirrored in CPHS data (Figure 3). As with PLFS, there is no significant dip in female employment during the pandemic years, and female employment rises noticeably after August 2022.

2. Annual Survey of Unincorporated Sector Enterprises (ASUSE) data

This survey measures various features of the non-agricultural informal sector (excluding construction) by gathering data on economic and operational characteristics of establishments in manufacturing, trade and other services. Given that a predominant share of India’s workforce is in the informal sector, this survey provides very useful data on this vast component of the Indian economy.

The 2023-24 results indicate a clear recovery from the Covid-19 disruption. Overall, the number of establishments as well as the workforce and gross value added have increased. Since our focus here is on the female workforce, we examine two indicators from the survey, the number of female-owned proprietary establishments (Figure 4) and number of female workers by sector residence (Figure 5).

Both indicators show some rise in terms of female participation. We should note that Figure 5 shows absolute numbers whereas all other figures show percentages, so direct comparisons are not possible, but we can compare trends.

A comparison between Figures 1 and 5 suggests that the rise in rural female labour force participation is being driven mostly by increased participation in agriculture. The percentage increase in the number of rural female workers between 2015-16 and 2021-22 was 2.6 percent, whereas the increase between 2017-18 and 2021-22 (the closest comparable years for PLFS) was 48 percent. Note that this is not the annual rate of growth, but a percentage increase between two time periods. This indicates that the increase in the number of female non-agriculture, non-construction workers (Figure 5) in rural India is not as sharp as the trend seen in rural female LFPRs percentages (Figure 1). We return to this point in Part B of this piece.

3. Employee Provident Fund Organisation (EPFO) data

One source for tracking formal jobs in India is the data released by the government on new subscribers or members who enroll in social security schemes like the Employees’ Provident Fund (EPF), Employees’ State Insurance (ESI) and the National Pension Scheme (NPS). CEDA has analysed EPFO data in a previous article as well.

Given India’s large informal sector, EPFO data likely reflect trends for only a small share of the workforce. Moreover, an increase in EPFO numbers may indicate a shift from informal to formal jobs, rather than net employment growth. One caveat is that organizations with 20 or more employees must register with EPFO. If a company with 19 employees hires one more, all 20 must register, which would show as 20 new EPF subscribers. While this reflects formalization, it doesn’t necessarily mean 20 new jobs were created.

Despite these limitations, EPFO data provides valuable insights into formal sector employment trends. The net payroll is defined as the sum of new EPF subscribers and number of EPF members who exited and resubscribed minus the number of EPF subscribers who exited. (i.e. Net payroll = (New EPF subscribers + EPF subscribers who exited and rejoined) – EPF subscribers who exited).

Figure 6 shows net payroll numbers, revealing substantial gender gaps but a clear upward trend in female enrollment. There is a slight dip between 2022-23 and 23-24 which could reflect yearly fluctuation, but the overall trend is increasing.

4. Micro, Small and Medium Enterprises (MSME) data

Unfortunately, MSME annual reports from 2017–18 to 2023–24 do not provide gender-disaggregated data on enterprise owners or workers over time. The only indicator showing movement is the gender breakdown of Udyam registrations (Figure 8). Udyam, launched in 2020, is an online self-declaration-based registration system for MSMEs seeking government benefits. The share of registered enterprises owned by women doubled from 19 percent to over 38 percent in just one year (Figure 7). Given that we have data only for two points in time, we cannot determine for sure if this jump is due to improved reporting or reflects an actual increase.

What does the rise reveal?

In a previous analysis, we noted that the increase in female LFPRs occurred in two phases:

1. Phase One (2018–19 to 2019–20), when it was driven by an increase in the proportion of women classified as “unpaid helpers.” This likely reflects improved measurement of unpaid work on family farms and other livelihood activities, which is often undercounted in labour force surveys.

2. Phase Two (2021–22 to 2022–23), which saw a rise in “own-account workers,” which could include farming, livestock, dairy, poultry, or low-productivity, survivalist activities.

The analysis also pointed out that this increase in female LFPRs has not been accompanied by higher earnings for rural women, a rise in women as employers, or an increase in regular salaried jobs. How does the distribution of workforce categories from PLFS data compare to that from CPHS data? Figures 8 and 9 show the comparison for rural and urban areas, respectively.

CPHS data indicates that the increase in employment for women in rural India is being driven by an increase in proportion of women engaged in farming, which shows an overall upward trend since 2019 from 20.6 percent in Jan-Apr 2019 to 26.5 percent in Sep-Dec 2024. This proportion had risen to nearly 37 percent during the 2020 Covid-19 lockdown, but that reflected a shutdown of virtually all economic activity other than agriculture. This is accompanied by virtually no change in proportion of women who work as salaried employees and a declining trend in women working as wage labourers and small traders.

In PLFS, agriculture is classified as self-employment; thus, this picture corresponds to the one that emerges from PLFS data.

Figure 9 shows that in urban areas, between 2021 and 2024, there has been an increase in proportion of women in salaried employment, from nearly 50 percent in Jan-Apr 2021 to nearly 55 percent in Sep-Dec 2024, with fluctuations between waves. All other categories of workers are either constant or show a small decline.

The PLFS show that the proportion of women in regular salaried work declined slightly but that in self-employment steadily increased. Within self-employment, the category of “own-account” work increased.

What is own-account work? It refers to work where a person works mostly alone (sometimes with partners) but does not employ others. This typically involves low-productivity, low-earning work that is often survivalist in nature.

Overall, despite different sampling frames and definitions of labour force participation, both PLFS and CPHS datasets show a fairly similar trend and comparable distributions of employment types for rural women. For urban women, there is a divergence in the change in composition in that PLFS data show an increase in own-account work and CPHS data show an increase in salaried work, which could possibly be due to difference in sampling.

Are we nearing the end of the problem?

The gender gap in rural LFPRs has decreased from 51.8 percentage points in 2017–18 to 32.6 points in 2023–24, while the urban gap has narrowed from 54.1 to 47.6 percentage points. Despite this progress, the gap remains substantial, and it is still higher in India than in countries with comparable income levels.

Moreover, as mentioned in previous analyses, the rise in FLFPRs has not been accompanied by increases in earnings, regular wage employment, or access to well-remunerated jobs with benefits. Thus, while the rise in female LFPR is real, it would be premature to view it as a transformative shift. The nature of this increase—driven by unpaid and low-productivity work—signals that significant challenges remain in achieving meaningful and equitable economic participation for women in India.