Why are fewer married women joining the work force in rural India? A decomposition analysis over two decades

Abstract

In contrast with global trends, India has witnessed a secular decline in women’s employment rates over the past few decades. We investigate this decline in rural areas, where the majority of Indian women reside. Using parametric and semi-parametric decomposition techniques, we show that changes in individual and household attributes fully account for the fall in women's labor force participation in 1987-1999 and account for more than half of the decline in 1999-2011. Our findings underscore increasing education levels among rural married women and the men in their households as the most prominent attributes contributing to this decline. We provide suggestive evidence that a rise in more educated women's returns to home production, relative to their returns in the labor market, may have adversely affected female labor force participation in rural India.