Women in the Workforce

Womenomics: Why India Needs to Engage its Women in the Workforce

In 2020, India’s female labour force participation rate was 24.8%, which means that 3 out of 4 Indian women do not work. Not only does this number put us behind our neighbours Bangladesh, Nepal, and most of sub-Saharan Africa, but it is also trending downwards, declining by almost 10% in the past 15 years. So while Indian women have made strides in higher education, they also continue to drop out of the economy.

Why is this a cause for concern? Firstly, women’s economic empowerment is critical to achieving gender equality. Paid employment allows women control over their own resources, access to financial institutions and social protection, increased independence and decision-making power in their households and communities, and a platform for participating in public life and institutions. 

Moreover, these benefits have a ripple effect: reports from the UN show that women’s economic empowerment positively impacts human development, income, economic growth, and national competitiveness. According to a report by McKinsey Global Institute, increasing women’s labour force participation by just 10% could have added $770 billion to India’s GDP by 2025 had we begun in 2018. At the organisational level, progressive policies and a gender-balanced workplace have been linked to higher profitability, increased innovation, lower employee attrition, and better decision making.

Goldman Sachs economist Kathy Matsui coined the term Womenomics, arguing that the case for women’s participation in the workforce is not cultural or social, but plain economics. Her strategy for Japan’s economic growth had one simple proposal: more working women. No country has moved from being low or middle income to high income without significant female participation in its workforce. India cannot unlock its full potential if it excludes almost 50% of its population from the economy. In the words of former World Bank MD Caroline Anstey, ‘Gender equality is smart economics.’ This is not mere theory—the case for Womenomics has been proven in Japan.

In 2013, Japanese Prime Minister Shinzo Abe set a national target to increase the number of women in the workforce by focusing on improving four key parameters: the female labour force participation rate, the percentage of women returning to work after their first child, female representation in positions of leadership, and the number of fathers who take paternity leave.

To achieve this, Abe focused on expanding childcare capacity and improving parental leave policies. Japan now offers some of the most equitable and generous parental leave benefits in the world—both parents are eligible for up to a year of paid parental leave. Additionally, Japanese legislation mandates that large companies publish gender diversity data and action plans to set numerical targets for diversity and inclusion. In recent years, the country has introduced laws to ensure equal pay and improve work-life balance for both genders. The result: a record 71% of Japanese women were a part of the workforce in 2019, an increase of almost 10% since 2013. 

Similar initiatives have been underway across the world, with the most successful case being the Nordic countries. Policies such as parental leave benefits, mandatory paternal leave, and gender quotas have enabled these countries to close almost 80% of the gender gap.

While it is clear that no policy can be directly translated from one country to another, the proven success of Womenomics has some important lessons on how India can include more women in the economy. The first and most critical is that for change to take place, the government must recognise this issue and set a national target of increasing women’s participation in the workforce.

To introduce effective policy on including more women in the workforce, we first need to know what keeps them out. We do not know how many female graduates join the workforce each year, how many drop out, and why. Incorporating ‘women and work’ questions in the NSSO survey will help systematically collect data to design evidence-based policy interventions and measure progress.

Another significant step would be to create a National Task Force or Mission for working women in India.  Not only would this help mainstream an issue neglected until now and give it national importance, but the task force will also provide a blueprint for closing India’s gender gap for the future.

Lastly, inspiring and incentivising city administrations to work on progressive gender initiatives could help deliver a better world for working women and men. This would include opportunities for economic growth, affordable and high-quality childcare and eldercare, progressive gender equity policies, safe public spaces, public transport, financial access, and law and order.

Bringing women into the workforce isn’t a function of budget alone, it requires policy design and political will. So far, India has viewed its women as victims and focused on how they can survive. It is now time for us to imagine Indian women as assets and empower them to thrive.

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