Women’s unemployment rate falls to 16-month low

The unemployment rate for women was last this low around Diwali in 2022. The unemployment rate has dropped for women from 14.9 per cent in December 2023 to 11 per cent in January 2024, according to data from the Centre for Monitoring Indian Economy (CMIE). It was higher in January 2023 at 13.5 per cent. The current unemployment rate is the lowest in the 16 months since (including) October 2022.

The unemployment rate measures the number of people who are unemployed and actively looking for a job, among those in the labour force. The labour force constitutes people who are employed and those who are unemployed and actively looking for employment.

The labour participation rate is the share of the labour force in the total working-age population (aged 15 years and above).

The improvement in unemployment has come even as the labour participation rate has declined. This suggests that a lower share of women participating in the labour force are unemployed, but the proportion of working-age women who are part of the labour force has come down.

A fall in the labour participation rate may be a cause for concern as India struggles to improve its share of women in the workforce among international peers.

Women’s labour participation rate dropped to 10.3 per cent in January this year from 12.1 per cent in December 2023, according to CMIE data. It was higher in rural areas at 10.5 per cent than in urban areas at 9.9 per cent. But the fall was sharper in rural areas as the female labour participation rate had been 13.3 per cent in December. The urban female labour participation rate improved marginally from 9.8 per cent in December.

For males, it declined marginally from 67.9 per cent in December 2023 to 67.6 per cent in January 2024, with limited changes in rural and urban areas.

In the Interim Budget 2024 speech, Finance Minister Nirmala Sitharaman said that women’s participation in the workforce has increased, which has been seen in long-term government data, though a divergence is seen in private data such as that of CMIE.

Separately, the share of females in the total labour force is the lowest in India compared to the Group of Twenty (G20) nations except for Saudi Arabia.

Data from the World Bank shows that 23.5 per cent of the Indian workforce were women in 2022 compared to 23.4 per cent in 2014.