The economy of a country, encompassing the production, distribution, and consumption of goods and services across various sectors, is intricately linked with labour dynamics. Labour serves as a fundamental component in each sector, from agricultural production and industrial manufacturing to service delivery and financial transactions. The interactions between labour, businesses, and government entities not only drive economic productivity but also determine employment opportunities, wage levels, and overall economic stability (Forgha & Mbella, 2016) .
For example, in agriculture, labor is crucial for planting, harvesting, and processing crops, directly impacting food production and rural employment. In the industrial sector, skilled labour drives innovation and manufacturing efficiency, contributing to technological advancement and export competitiveness. Meanwhile, the services sector heavily relies on labour to deliver essential services like education, healthcare, and banking, which are vital for societal well-being and economic growth(Cai, 2010). Adequate labour supply, along with efficient utilization of labour, is essential for enhancing productivity and fostering economic prosperity. Moreover, labour markets influence wage levels, income distribution and social mobility within a society (Role_of_Labour_in_India_Development, 2022). Gender inclusion in the labour force is crucial for several reasons. The global population stands at approximately 7.9 billion, with women comprising slightly over 49 percent of this figure (Facts and Figures: Economic Empowerment | UN Women – Headquarters, n.d.). India is one of the world's most populous countries where women represent approximately 48.5 percent of the population, which exceeds 1.3 billion (Pal & Shekhar, 2024). The participation of women in socio-economic sectors of India represents an important aspect of the global discourse on gender equality and economic development, transcending geographical boundaries and societal contexts. Across the world, engagement of women in the workforce is not just matter as individual empowerment but it is a crucial force for economic growth, social progress, and sustainable development (World Economic Forum, 2021). The engagement of women in the workforce is critical for the economic development of any region as they contribute an almost half of its population but despite significant efforts in various fields, Indian women face considerable challenges that hinder their full participation in the economy. Factors such as social norms, safety concerns, lack of access to education, and inadequate infrastructure contribute to low labour force participation rates among women (Das et al., 2020). The labour force participation rate for women in India was around 20.3% in 2019, significantly lower than the global average of about 47% (World Bank, 2021).
Efforts to address these challenges have been undertaken at multiple levels. The Indian government has launched several initiatives aimed at promoting gender equality and women's economic empowerment. For example, the Beti Bachao Beti Padhao (Save the Girl Child, Educate the Girl Child) scheme focuses on improving the welfare of girls and ensuring their education and participation in social sector. (Ministry of Women and Child Development, 2020). Other than this, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) ensures that at least one-third of beneficiaries are women, providing them with opportunities for paid work, financial independence and social security. (Ministry of Rural Development, 2019).
The introduction of policies like the Maternity Benefit (Amendment) Act, 2017, which ensures paid maternity leave to 26 weeks and the Pradhan Mantri Mudra Yojana, which offers financial support to women entrepreneurs, has enhanced the participation of women in workforce (Ministry of Labour and Employment, 2017; Ministry of Finance, 2021). These measures, while progressive, need to be supported by broader societal changes and effective implementation then only a more enabling environment for women can be created.
Corporate India has also started to recognise the value of gender inclusivity to drive business to success. Companies are rapidly adopting gender diversity policies and creating more inclusive workplaces. The Securities and Exchange Board of India (SEBI) has mandated the inclusion of at least one woman on the boards of various listed companies, aiming to improve gender diversity in corporate leadership (SEBI, 2018).
Despite these efforts, significant work is still remains to be done. Minimizing the gender gap in India requires a multifaceted approach that includes policy reforms, societal changes, and the active participation of all stakeholders, including government, private sector, and both urban rural societies. Learning from global practices, while tailoring suitable solutions to the unique Indian context, is needed to accelerate progress toward gender equality and women's empowerment (UN Women, 2023).
Nations such as Sweden, Norway, and Iceland have led the charge by adopting comprehensive strategies that prioritize the needs of working women, while Western countries have made notable progress in this regard, challenges persist, particularly in developing nations like India. Here, entrenched gender norms, socio-cultural barriers, and structural inequalities continue to pose significant obstacles to women's full integration into the workforce. The Indian context presents a complex tapestry of socio-economic dynamics, characterized by vast disparities in women's labor force participation rates across different states and regions.
Recognizing the significance of women's participation in economic development is paramount, both on a global scale and within the context of India.
Neglecting the participation of women in the economy means overlooking a significant portion of the workforce and talent pool (Verick et al., 2014). By excluding women from economic activities, countries limit their potential for growth and innovation. Furthermore, promoting gender equality in the workforce is essential for achieving sustainable development goals. Research consistently demonstrates that empowering women economically leads to broader socioeconomic benefits, including poverty reduction, improved health outcomes, and greater social inclusion (Angala Eswari, 2019a). Women's participation in the labour force contributes to higher household incomes, increased consumer spending, and enhanced overall productivity (Klasen et al., 2012).
Women's economic participation contributes significantly to GDP both globally and in India, encompassing various sectors and roles. Globally, women contribute an estimated $18 trillion to GDP (Women and Growth March 2019 | Volume 56), representing a substantial portion of the world's economic output. In India, women's economic participation is similarly vital, with a diverse range of contributions across industries. In the formal sector, women participate in various roles, including manufacturing, services, finance and technology. In many countries, including India, women are increasingly joining the workforce, driving productivity and innovation. However, gender disparities persist, with women often facing lower wages, limited career advancement opportunities, and underrepresentation in leadership positions (Akhtar et al., 2023).
In the context of a country like India, where gender disparities in the labour force are prevalent, addressing barriers to women's economic participation is imperative for realizing its full developmental potential. Policies and initiatives aimed at promoting women's education, skills development, and access to employment opportunities are essential for fostering inclusive growth and advancing towards becoming a developed nation.
This paper underscores the indispensable nature of women's involvement in economic development initiatives. It contends that involving women in economic processes not only empowers their rights but also facilitates the potential for rapid and inclusive GDP development. According to the World Bank, closing the gender gap in workforce, participation could increase India's GDP by 27%. Gender Overview: Development News, Research, Data | World Bank, 2023. Moreover, research by A.D.B. (Asian Development Bank, 2016) suggests that advancing gender equality could add $12 trillion to global GDP by 2025.
During the 1980s, the Gender and Development (GAD) approach emerged from the examination of Women in Development (WID) initiatives. Gender and Development acknowledged the significance of gender dynamics in improving women's lives, emphasising the need to focus on both women and men. This approach highlights that merely including women and girls in existing development processes is insufficient; addressing the root causes of their exclusion and power imbalances is essential.
In India, women fulfil dual roles as producers of goods and services alongside their domestic responsibilities as wives and mothers (Angala Eswari, 2019b). Despite this multifaceted contribution, their role in economic development has often been overlooked. Commonly cited challenges include issues related to health, malnutrition, frequent childbearing, and access to education. To enhance women's participation in economic development, it is imperative to provide them with essential services such as training in income-generating activities, easy access to low-interest loans, and family planning services to enable them to control childbearing.
Globally, it has been evident that educating and empowering women serve as catalysts for rapid socioeconomic growth. Societies with greater gender equality not only provide enhanced socio-economic opportunities for women but also experience accelerated and more equitable growth (Agarwala & Hazarika, 2004). This is evidenced by gains in poverty reduction, environmental sustainability, consumer choice, innovation, and broader participation in decision-making processes. Economic development and gender equality are intrinsically linked, as lowering barriers faced by women facilitates their integration into economic activities in various sectors, fostering inclusive growth. Notably, a significant proportion of women operate micro, small, and medium-sized enterprises MSMEs, with women owning more than 30% of such enterprises. However, there remains considerable untapped potential, as only one in five women participates. (Angala Eswari, 2019b).
Over time, economic growth models have evolved to emphasise the human factor in economic progress leading to the development of endogenous growth theories in scholarly literature. These theories predominantly focus on growth catalyzed by input advancements rooted in investments in human capital. The endogenous growth theory aims to elucidate economic growth, particularly per capita GDP, through the accumulation process itself, without relying on external, exogenous components (Herrera, 2006). Scholars such as Pal, Shekhar, Sajid and Omran (Pal & Shekhar, 2024),(Sajid et al., 2021),(OMRAN et al., 2022) underscore the significance of female labour force participation, female education and fertility rate in driving economic growth.
Within the framework of the endogenous growth model, labour force participation emerges as a key determinant, explored by scholars across various dimensions such as age, race, sex and income groups (Willis et al., 2020).
Gender studies concerning labour participation remain pertinent, reflecting ongoing concerns in development discourse for several countries. Examining Lucas's endogenous growth model, it becomes evident that the relationship between economic growth and female labour force participation holds dual significance. An increase in the female labour force participation rate not only fosters economic growth but also contributes to women's empowerment, indicating a mutually reinforcing relationship between economic development and gender equality (Ernesto et al., 2013)
Scholars widely acknowledge that empowering women can enhance efficiency, provided they have access to education, healthcare, and earning opportunities, underscoring the importance of addressing gender disparities for sustained economic growth (Duflo, 2012);(Klasen, 2020). Moreover, the long-term benefits of increasing women's education positively impact growth, as educated women are positioned for better careers, higher incomes, and increased opportunities for economic advancement.
Recent research has shed further light on the intricate relationship between female labour force participation and economic growth. For instance, a study (Balafoutas & Sutter, 2012) found that increasing women's participation in the labour force in India led to significant improvements in household welfare, including better child health and education outcomes. Similarly (Klasen et al., 2009) and (Yıldırım et al., 2020) demonstrated that reducing gender disparities in access to education and employment opportunities could substantially boost economic growth and reduce poverty in developing countries.
Researchers such as Stella Tsani, Chinasa Urama and Nivedita Jha, etc. (Hwa et al., 2020; Jha et al., 2019; OMRAN et al., 2022; Tsani et al., 2015; Urama et al., 2022) continue to devote considerable attention to exploring the correlation between female labour force participation and economic growth, delving into the intricacies of this relationship.
Objective:
To analyze the contribution of women to India's workforce from 2012 to 2022 and evaluate its impact on the country's economic development.