It is understood that not only gender equality suffers a setback when women leave the workforce, GDP suffers a blow as well
Global economies are experiencing the worst recession since the Great Depression, owing to the pandemic-induced lockdowns; what is unique is its differential impact on the female labour market. International Labour Organisation (ILO) defines the gender gap in Labour Force Participation Rate (LFPR), as a measure of the proportion of a country’s working-age population that engages actively in the labour market, either by working or looking for work. It provides an indication of the size of the supply of labour available to engage in the production of goods and services, relative to the population at working age.
Examining data from Centre for Monitoring Indian Economy (CMIE)-Consumer Pyramids Household Survey (CPHS) between January 2019 and August 2020, Ashwini Deshpande from Ashoka University concludes that compared to the pre-pandemic level, the likelihood of women being employed is 9.5 percentage points lower than that of men. This indicates that the gender gap in employment rate has widened relative to the pre-pandemic level. A falling female participation force is not an unprecedented occurrence—the disparity in LFPR continues to exist despite high rates of economic growth in India. The pandemic has deepened the existing cracks, with a fear that a lot of these women might never return to the workforce. There is a risk that the exodus of women from the workforce could become permanent, reversing not only gender equality gains, but GDP gains.
A falling female participation force is not an unprecedented occurrence—the disparity in LFPR continues to exist despite high rates of economic growth in India.
The unemployment rate has fallen below pre-pandemic level, i.e., 6.95 percent on July 2021 down from 7.22 percent on January 2020. This change has been accompanied by a fall in labour participation rate in the same duration, 40.17 percent in July 2021 down from 42.90 percent in January 2020, indicating that there is 2.73 percentage points less people in the job market in comparison with pre-pandemic level. These people have permanently exited the labour force and most of them happen to be women.
One of the central reasons for disparity in the LFPR has been the traditional mindset of women’s role as the primary care-giver at home (unpaid care work) along with the sole responsibility of household chores, which may lead to a fall in percentage of women in workforce. Working mothers have always worked a “double shift”—a full day of work, followed by hours spent caring for children and doing household work.
Moreover, women were overrepresented in the sectors—health and education—that were hit most aggressively due to the countrywide lockdown. This is, in fact, contrary to the 2007-08 ‘mancession’—when more men lost employment.
Working mothers have always worked a “double shift”—a full day of work, followed by hours spent caring for children and doing household work.
With an unfavourable job market, self-employment has not proven to be a fallback option for these women. According to study conducted by Abraham et al. of Azim Premji University, 47 percent of women had moved out of the workforce after the lockdown across employment arrangements and unlike male workers, self-employment does not emerge as a clear fallback option for female workers with only 2 percent of women in permanent salaried jobs moving into self-employment during lockdown in comparison with 37 percent male workers in the same category.
The lockdown induced by the COVID-19 pandemic has pushed the full-time workforce towards gig work, especially women, who saw a multifold increase in domestic and care burden during the nationwide lockdown.
So far, the concept of the gig economy has been limited to the informal workers (both skilled and unskilled) including migrant workers. Boston Consulting Group (BCG) divides the definition of the gig economy into three parts—work done by an individual, employed on a per-time or per-task basis (with no commitment of future work), and having the flexibility to choose hours of work with no negative impact on earning potential.
47 percent of women had moved out of the workforce after the lockdown across employment arrangements and unlike male workers, self-employment does not emerge as a clear fallback option for female workers with only 2 percent of women in permanent salaried jobs
BCG further estimates the potential of the gig economy to service up to 90 million jobs in India’s non-farm economy alone, transact over US $250 billion in volume of work, and contribute an incremental 1.25 percent (approximately) to India's GDP over the long term. These numbers have been predicted for mainly the four largest industry sectors—construction, manufacturing, retail, and transportation and logistics, which could alone account for over 70 million of the potentially ‘gigable’ jobs.
Some people have embraced the work-from-home setup and others are still at war with it. Women struggle to find time between household chores and children/child care for office work, which has forced them to eventually quit paid work. They need flexible time and contractual jobs or ‘gigs’ that not only help pay their bills but are also convenient enough to manage work.
Gig work not only gives women much needed flexibility but also gives them the independence to choose exactly what kind of work they want to do and, of course, financial independence.
However, these gigs don’t solve everything. They lack the perks and security that come with a permanent job. Interestingly, the bias has managed to find a place in the gig economy. Online platforms that provide contractual work using machine learning algorithms are at a risk of being programmed with some inherent biases into them at the time of coding. These algorithms teach themselves, as they work over time and are fully capable of reinforcing the said biases. Apart from the compensation they offer, these platforms need to be free from the ingrained gender bias.
A pandemic recession depreciates the skills of women who reduce their hours or drop out of the labour force all together, leading to a substantial widening of the wage gap that persists after the recession.
As much as the customers (subscribing to the said online platforms) are at risk of being harassed, the gig workers are also at risk of being harassed by the customers. This calls for dispute redressal policies that not only legally shield the client but also the female gig worker from issues like work place harassment.
It is crucial that we keep these women in the labour force. According to a discussion paper published by Institute of Labour Economics, regular recessions reduce the gender wage gap by 2 percentage points, whereas a pandemic recession increases it by 5 percentage points. The study explains that a pandemic recession depreciates the skills of women who reduce their hours or drop out of the labour force all together, leading to a substantial widening of the wage gap that persists after the recession. This is in contrast with regular recessions that affect men comparatively more and moderately reduce the gender wage gap.
With the growing popularity and need of gig work, it has become all the more important to regulate this economy and ensure equity. In September 2020, the government introduced the bill, “Code on Social Security 2020”, to register gig workers and set up a social security fund for them. This code mandates companies employing gig workers to allocate 1 percent-2 percent of their annual turnover or 5 percent of the wages paid to gig workers, whichever is lower, to the social security fund. The code aims to extend social security benefits such as maternity leave, disability insurance, gratuity, health insurance, and old age protection to the workers in the gig economy.
Social norms hamper movement of women from formal jobs to gigs. Such biases need to be done away with to reap the benefits of this multimillion-dollar economy.
Introduction of suitable regulations in existing policies can help streamline the gig ecosystem. Smahi Foundation has extensively described numerous such policy recommendations in its recent report. Amongst the many recommendations, the report talks about introducing ‘Portable Benefits Funds’ and a ‘National Registry of blue-collar platform workers’ in the newly formed Code on Social Security, 2020 under the Ministry of Labour and Employment for platform workers.
The Portable Benefits Fund will act as a cushion for gig workers, where companies contribute a portion of employees’ income to the fund. The sum can be cashed when the employee leaves the organisation or retires. Apart from generating savings over the years, the sum can also secure the employees against unforeseen events. The ‘portability’ element is extremely important as gig workers work on various platforms simultaneously and contribution of each employer can go into a common fund. The percentage of contribution can vary across employers.
The idea behind the National Registry of blue-collar platform workers is to collect an accurate database of the gig economy workforce, which will help the government track gig workers and facilitate introduction of comprehensive policies in the future.
Social norms hamper movement of women from formal jobs to gigs. Such biases need to be done away with to reap the benefits of this multimillion-dollar economy. Or as ILO frames it, “The more scarce jobs are in the aftermath of the COVID-19 crisis, and the bigger the losses in employment women face during the lockdown phase, the harder their employment recovery will be.” The longer this higher burden on women lasts, the more women will leave the labour market permanently, reversing not only progress towards gender equality, but also stunting economic growth.
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Ananyashree Gupta was a Research Assistant with the Centre for Economy &: Growth Delhi.
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