Clipped from: https://www.thehindubusinessline.com/opinion/nature-of-womens-work/article68996922.ece
Self-employment on the rise, but earnings low
The recently released Quarterly Bulletin of the Periodic Labour Force Survey (PLFS) demonstrates encouraging trends in women’s economic participation in India. Data for Q2 of FY25 reflects modest yet positive developments in key employment indicators for women aged 15 and above in urban areas. Compared to the previous quarter for this group, the labour force participation rate increased from 25.2 per cent to 25.5 per cent, the worker population ratio rose from 23 per cent to 23.4 per cent, and the unemployment rate dropped from 9 per cent to 8.4 per cent. These figures mark a considerable improvement over the past six years — during the same quarter in FY19, the female labour force participation rate was 15.3 per cent, the worker population ratio was 13.4 per cent, and the unemployment rate stood at 12.7 per cent.
Distribution of workers
The decline in the total urban unemployment rate to its lowest since the start of the PLFS, at 6.4 per cent in Q2 FY25, is largely driven by women’s progress in this metric. The most substantial drops in female urban unemployment by percentage points occurred in Maharashtra, Jammu and Kashmir, West Bengal, Uttarakhand, and Uttar Pradesh.
A deep dive into the distribution of workers by broad employment status reveals a growing trend of self-employment among women. The share of self-employed women increased from 40 per cent in Q1 FY25 to 40.3 per cent in Q2. In contrast, the share of men in self-employment declined from 40 per cent to 39.8 per cent during the same period, while the proportion of men in regular wage or salaried jobs rose. For context, in the corresponding quarter of FY19, women’s self-employment stood at 33.4 per cent, compared to 39.4 per cent for men.
This indicates that while men’s self-employment has reverted to pre-pandemic levels, women’s self-employment remains elevated. Self-employment is categorised in two ways in the PLFS.
First, own-account workers (who run their enterprise without hiring any wage workers for more than a month) or employers (who hire at least one wage worker) and, second, helpers in household enterprises who are counted as workers without pay. Notably, a significant proportion of women are employed as helpers in household enterprises, at 12.1 per cent, compared to 4.3 per cent for men. Moreover, this figure has increased since the previous quarter, up from 11.4 per cent in Q1 FY25. Simultaneously, the share of urban women aged 15 and above working as own-account workers or employers, salaried employees, or casual labourers remains low and declining.
A growing number of women embracing entrepreneurship across the country is good news. Yet, it would be remiss of us not to flag the argument that the rise in women’s self-employment tends to be a marker of economic distress in the Indian context, through which individuals who lack other viable employment opportunities must find ways to sustain themselves. The PLFS shows that the average earnings of self-employed workers are significantly lower than those of wage workers. The rise in self-employed women may be linked to post-pandemic economic hardship, which disproportionately affects women compared to men. Many of these self-employed women were, it is argued by some experts, likely pushed into necessity-driven entrepreneurship for economic survival.
The bottomline is that the rise in female self-employment contributes to a declining unemployment rate. Yet, women in India remain predominantly engaged in labour-intensive, unpaid or low-paid, and informal work, often lacking social security and job protections, and the PLFS data highlights the persistent and growing gender disparities in job quality. Therefore, as self-employed women come under policy focus, quality job creation is the need of the hour.
Mondal is a faculty member at Tata Institute of Social Sciences, and Ganguly is a Senior Research Associate at Pahle India Foundation
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