Are we undercounting India’s women workers?
India needs more women to join the workforce. According to the latest Periodic Labour Force Survey (PLFS), only 25.9% of women between the ages of 15 and 49 were either working or looking for work. This number is 78.3% for men. Unless the gender gap in employment is bridged, the economy will not able to exploit the full potential of its young workforce. This has a direct bearing on per capita income levels. An HT analysis of per capita worker incomes and per capita incomes in China and India showed that India’s gap with China was much larger when it came to per capita incomes than per worker incomes. According to World Bank data, China’s per capita GDP was 2.4 times that of India in 2016. In terms of per worker GDP, this ratio was just 1.7. The gap between China’s lead over India in terms of per capita GDP and per worker GDP has been increasing over the past three decades.
While there can be little doubt about the need for bringing more women into the workforce, two government reports suggest that there is significant ambiguity about the number of women workers in the country.
PLFS seems to be a large underestimate of working women in many states
Last week, the ministry of health and family welfare released summary statistics for 17 states and five union territories for the 2019-20 National Family and Health Survey (NFHS). The state-wise fact sheets give information on the share of women of age 15-49 years who worked in the last 12 months and were paid in cash.
For seven out of the 17 states for which the 2019-20 NFHS findings have been published, this number is greater than not just the female work force participation rate (WPR) but also the labour force participation rate (LFPR) in the 2018-19 PLFS for the same age group.
LFPR is defined as the share of population which is either working or looking for a job, while WPR is the share of population which actually employed. Unemployment rate is the difference between LFPR and WPR.
In states like Bihar, the number reported by the NFHS is more than three times the female WPR in the PLFS. To be sure, the NFHS number for states such as Himachal Pradesh is much lower than the PLFS stats.
The mismatch between PLFS and NFHS numbers is not new. The 2015-16 NFHS says that 25.6% of women worked and were paid in cash in the last one year. The 2017-18 PLFS puts the LFPR and WPR of women at 24.8% and 23.1%.
What explains the discrepancy between NFHS and PLFS estimates? There could be two possible explanations.
By focusing on cash, the NFHS might be excluding workers who are paid in kind or not salaried at all
Because the NFHS factsheets publish the share of women who were paid in cash in the last one year, it should exclude women workers who were paid in kind or not paid at all. The economic census (2013-14) shows that more than 70% of economic enterprises in the country did not even have one hired worker. A women worker working in a household enterprise might not be recorded in the NFHS estimates of working women earning cash. This could explain why the NFHS numbers are lower than the PLFS numbers for share of working women in some states.
The PLFS follows a more rigorous criterion for being qualified as working
The PLFS follows a more rigorous criterion when it comes to counting a person as working. For example, the usual status criterion of work requires that a person should have worked for majority of the past 365 days. The current weekly status of work tracks a person’s activity in the last seven days preceding the survey. If a woman took up some paid work for less than six months, months before the PLFS was conducted, she might not get counted in the PLFS as employed but could show up in the NFHS numbers as having worked for cash payment. This could explain why the NFHS numbers are higher than the PLFS numbers.
A 2018 report by the Azim Premji University reported a finding from a survey in West Bengal which found that non-availability of work in the area was the biggest reason why women did not take up paid employment. Data from the 2011 census shows that gender gap worsens for women as distance to workplace increases (https://bit.ly/3pcX0R5).