Discouraged Worker Effect among Indian Women: Evidence from FLFP Survey

Based on a household survey of 4713 females in the states of Delhi, Karnataka, Jharkhand, Rajasthan and Madhya Pradesh during the period of November 2021-January 2022, conducted by IWWAGE, this study aims to contribute to the understanding of ‘discouraged worker effect’ particularly for females and defining it in a more inclusive and comprehensive way. The study proposes to broaden the conventional definition where discouragement is related only to prevailing labour market conditions. In addition to the labour market conditions, the proposed definition considers the relevant individual-specific, household-specific factors and their interaction effects. The findings confirm a significant presence of ‘marriage effect’ as a discouragement factor for females. Also, it is observed that the ‘marriage effect’ is higher among the younger age-cohort of 18–24 years, the crucial period in determining one’s carrier path. A divergence from the U-shaped relation between education and female labour force participation is found in the study. According to the U-shaped relationship, women with tertiary level of education are more likely to join the labour force, as compared to those with secondary level of education. However, it is observed in this study that women with education level of post-graduation and above are found to be discouraged to join the labour force, which might arise due to the lack of availability of high-skill job opportunities. The study confirms the presence of ‘the income effect’ as among households with higher asset index and when the education level of the principal income earner and thus the earning capacity is higher, the discouragement to women members to join the labour force, is higher. But as the number of employed members increase, women in that household are found to be more likely to join the labour force. This might be because of the households being less restrictive due to their exposure to the outer world. Also, the discouragement effect is observed to be less in nuclear families as compared to joint families and also when the women receive skill training.