Addressing Gender Gaps in Labor Force Participation and Economic Contribution

When nearly half the population faces systemic barriers to economic participation, the consequences ripple far beyond individual households. The gender gap in labour force participation is not just a statistic – it reflects deep-rooted structural, social, and economic challenges that limit women’s ability to contribute to and benefit from economic growth. Understanding these gaps is the first step toward closing them.

How wide is the gender gap in labour force participation? 🔗

The numbers tell a striking story. According to the Periodic Labour Force Survey (PLFS), the female labour force participation rate (FLFPR) stood at 41.7% in 2023-24, compared to 78.8% for men. While the FLFPR has shown an upward trajectory – rising from a low of 23.3% in 2017-18 – it remains well below male participation and global averages.

More recent monthly PLFS data from November 2025 shows the overall female LFPR climbed to 35.1% (under the Current Weekly Status approach), driven primarily by gains in rural areas. Urban female participation, by contrast, has remained largely stagnant. The International Labour Organization’s modelled estimates place the figure even lower – around 32.8% in 2024 – compared to a global average of roughly 51%. Either way, the gap between men and women in the workforce is enormous.

There are also significant regional disparities. States like Rajasthan and Jharkhand have shown notable growth in female participation, especially among married rural women. On the other hand, states like Punjab, Haryana, and Bihar continue to report some of the lowest female LFPR figures in the country.

The rural-urban divide in women’s work 🔗

One of the most critical dimensions of this gender gap is the rural-urban divide. The recent rise in female labour force participation has been overwhelmingly driven by rural women. But the nature of this increase deserves scrutiny.

According to analysis by the Centre for Economic Data and Analysis (CEDA) at Ashoka University, the rise in rural female participation has not been accompanied by increases in regular wage employment, earnings, or access to jobs with good benefits. Much of this growth has come from women entering self-employment – particularly in agriculture – rather than moving into better-paid, formal sector jobs.

In fact, data from the PLFS shows a reverse structural shift: the share of rural women employed in agriculture rose from 71.1% in 2018-19 to 76.9% in 2023-24. Rather than diversifying into manufacturing or services – the expected trajectory in a developing economy – women are moving back into farm work. This is often driven by economic necessity rather than genuine opportunity.

In urban areas, the picture is different but no more encouraging. Female participation rates in cities remain stubbornly low, hovering around 22-25%. Limited access to safe public transport, the absence of affordable childcare, and restrictive social norms about women working outside the home all contribute to keeping urban women out of the paid workforce.

Unpaid work: the invisible contribution 🔗

One of the biggest blind spots in measuring women’s economic contribution is the extent of unpaid work they perform. Women shoulder a vastly disproportionate share of domestic responsibilities – cooking, cleaning, childcare, and eldercare – that do not get counted in official employment statistics.

According to the Economic Survey 2024, women’s unpaid care work contributes an estimated 3.1% to GDP. Yet this labour rarely translates into income, asset ownership, or any form of economic security for the women performing it. On average, women spend about eight times more time each day on domestic and caregiving responsibilities than men do.

What makes this even more problematic is the way it distorts participation data. The PLFS numbers show that women reporting “domestic duties” as their primary activity declined from 57.8% in 2017-18 to 35.7% in 2023-24. But much of this shift has been toward becoming helpers in household enterprises – a category that rose from 9.1% to 19.6% in the same period. In other words, many women have simply moved from unpaid domestic work to unpaid or poorly paid family labour, without a meaningful improvement in their economic independence.

The persistent gender wage gap 🔗

Even when women do participate in the paid workforce, they earn significantly less than men. The World Economic Forum’s Global Gender Gap Report 2024 placed India’s economic parity score at just 39.8%, ranking it 129th out of 146 countries. While this metric captures more than just wages – including labour force participation and access to opportunities – the pay disparity alone is stark.

PLFS data from 2023-24 reveals wage gaps across all categories of employment. Self-employed men earn roughly three times what self-employed women do. In salaried roles, men earn about 1.2 times more, and among casual labourers, men take home about 1.5 times women’s earnings. The gap is widest in agriculture, where women earn approximately half of what men do for comparable work.

Research also shows that the wage gap tends to widen at higher skill levels. In low-skill manual jobs, women earn about 29% less than men. But as one moves up the occupational hierarchy – from individual contributors to managers to directors – the gap grows. An IIM-Ahmedabad study found that while women at the individual contributor level earned about 2.2% less, the disparity rose to 4.9-6.1% at the director and senior executive levels.

Why does the wage gap persist? 🔗

Several interconnected factors keep the wage gap in place:

Occupational segregation channels women into lower-paying sectors and roles. Women are concentrated in education, healthcare, social work, and agriculture – sectors that are systematically undervalued compared to male-dominated fields like engineering, finance, and technology. The PLFS data consistently shows this clustering pattern.

Social norms around caregiving force many women into part-time, informal, or home-based work that pays less and offers no benefits. Even when women work full-time, they are often perceived as less committed due to assumed family responsibilities. Studies have found that women who work full-time already earn 34% less than men, and this gap widens further for part-time workers.

Discrimination in hiring and promotion compounds the problem. Women frequently encounter biased recruitment practices, and their work is often undervalued. Despite the Equal Remuneration Act of 1976 mandating equal pay for equal work, enforcement remains weak – particularly in the vast informal sector where over 86% of working women are employed.

Women in leadership: the glass ceiling holds firm 🔗

The underrepresentation of women at the top of the professional hierarchy is one of the most visible manifestations of the gender gap. Despite making up nearly half of university graduates, women occupy a shrinking share of roles as one moves up the corporate ladder.

According to McKinsey’s Women in the Workplace 2025 report, women account for 33% of entry-level positions in the formal private sector but their representation drops sharply at each subsequent level. This phenomenon – often called the “broken rung” – means women face a critical barrier in advancing from entry-level to the first managerial role, and this initial gap cascades upward through the entire pipeline.

Data from LinkedIn’s Economic Graph shows that the share of women in senior leadership roles rose only modestly from 16.6% in 2016 to about 18.3% in 2024. The Ministry of Corporate Affairs reported that as of March 2024, women held just 18.67% of board positions in listed companies – far below the global benchmark of 30%. In key managerial personnel (KMP) roles such as CEO, CFO, and COO, the figure drops to just 14.08%.

Sector-wise, the disparities are even more revealing. In the technology sector, women occupy only about 7% of CXO-level positions despite strong female participation in STEM education. The finance sector sees women holding roughly 11% of leadership roles in investment and banking. The sectors with the lowest female leadership representation include construction, oil and gas, mining, and utilities.

The economic cost of gender gaps 🔗

These gaps are not just a matter of fairness – they carry a tangible economic cost. When a large portion of the working-age population is underemployed, underpaid, or excluded from the workforce entirely, it drags down overall productivity and growth.

Goldman Sachs Research has estimated that simply restoring the overall labour force participation rate to its previous peak levels could add roughly one percentage point to potential GDP growth. With declining fertility rates set to slow labour force expansion in the coming decades, raising female participation becomes not just desirable but economically necessary.

McKinsey’s research similarly finds that companies with more women in leadership are 25% more likely to achieve above-average profitability. This is not surprising – diverse leadership brings varied perspectives, better risk assessment, and more balanced decision-making. The business case for closing the gender gap, in other words, is as strong as the moral one.

What is being done to bridge the gap? 🔗

Several policy interventions and institutional initiatives are attempting to address these disparities, though progress remains slow and uneven.

Legislative frameworks 🔗

The legal architecture includes the Equal Remuneration Act, 1976 (now subsumed into the Code on Wages, 2019), the Maternity Benefit (Amendment) Act, 2017 – which extended paid maternity leave to 26 weeks – and the Sexual Harassment of Women at Workplace Act, 2013. The Companies Act, 2013, mandates at least one woman director on the boards of certain categories of companies. However, compliance has been inconsistent. Between April 2018 and December 2023, over 500 companies were penalised for failing to appoint women directors, and 90% of those were listed companies.

Skill development and financial inclusion 🔗

Programmes aimed at women’s skilling and financial inclusion have contributed to the rise in self-employment, particularly in rural areas. The expansion of self-help groups (SHGs), greater access to digital banking, and initiatives under missions like the National Rural Livelihood Mission (NRLM) have helped bring more women into economically active roles. Yet the quality of these jobs – often low-skilled and poorly compensated – remains a concern.

Workplace policy reforms 🔗

In the corporate sphere, many organisations are implementing diversity and inclusion programmes, leadership development initiatives for women, and flexible work arrangements. A 2025 roundtable led by the Ministry of Labour and Employment at LBSNAA brought together policymakers, global organisations, and industry leaders to discuss achieving a 70% female workforce participation target as part of the Viksit Bharat 2047 vision. While ambitious, this signals growing institutional recognition of the problem.

Looking beyond numbers: quality over quantity 🔗

Perhaps the most important takeaway is that a rising FLFPR alone does not signal progress. If the increase is driven primarily by women entering unpaid family labour, subsistence agriculture, or low-paying informal work, it may reflect economic distress rather than genuine empowerment.

True progress means women accessing formal, well-remunerated, secure employment with social protections. It means closing the wage gap not just in headline numbers but across sectors and skill levels. It means building the infrastructure – childcare facilities, safe transport, workplace protections – that enables women to participate in the economy on equal terms.

It also means confronting the social norms that continue to assign caregiving and domestic work almost exclusively to women. As long as women spend eight times more time on unpaid care than men, no amount of policy reform will fully close the gap. Cultural change must accompany structural reform.

What do you think? 🔗

Given that much of the recent rise in female labour force participation has been driven by unpaid or low-paid work, should policymakers focus more on the quality of women’s employment rather than the quantity? And in your view, what is the single most effective intervention – childcare infrastructure, wage transparency laws, skill development, or something else entirely – that could make the biggest difference in closing the gender gap in economic participation?

References

1. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2204089&reg=3&lang=2
2. https://www.goldmansachs.com/insights/articles/the-economic-opportunity-of-indias-women-workers
3. https://ceda.ashoka.edu.in/too-good-to-be-true-steadily-rising-female-labour-force-participation-rates-in-india/
4. https://www.drishtiias.com/daily-updates/daily-news-analysis/female-labour-force-participation-in-india
5. https://www.business-standard.com/india-news/global-gender-gap-index-2024-indian-women-earn-rs-40-for-every-rs-100-indian-men-earn-124061200379_1.html
6. https://thesecretariat.in/article/mind-the-pay-gap-decoding-gender-wage-inequality-in-india
7. https://www.mckinsey.com/industries/social-sector/our-insights/women-in-the-workplace-2025-india-nigeria-and-kenya
8. https://thequantumhub.com/women-in-leadership-in-corporate-india/
9. https://www.directors-institute.com/post/why-women-still-struggle-for-a-seat-at-india-s-corporate-power-table
10. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2108281&reg=3&lang=2