Decoding the Variations in the Female Labour Supply in Rural India: Empirical Evidences Based on Previous NSSO Datasets

Abstract

The female labour force participation rate (LFPR) in India has been persistently declining and has exhibited an unusual pattern over the years, which deviates from the discourse of a U-shaped relationship between female LFPR and economic growth. The article is an attempt to provide some of the empirical foundations to the female LFPR in rural India, and further delves into a comprehensive understanding of the effects of different factors like household, social, economic and personal factors, empirically through previous NSSO data sets. The data sets used in the study are from NSSO 50, that is, from 1993-94 to NSSO 66, that is, 2009-10, to ascertain the factors that were significant over the years in determining the female LFPR in rural areas. These variables were tested to gain an understanding on the variations in female labour supply in rural India. Being cognisant and by problematising some of the significant factors that affected the female LFPR in the past, the article demands the state to exercise policies beyond its neoliberal framework and the ‘Keynesian welfare-state’ model of ‘superficial’ social security. Methodologically, three models were further created based on the NSSO 66 data set to showcase the perennial discouraged-worker effects among the females in LFPR in rural India. The article further empirically tests Jacob Mincer’s theory: ‘substitution effect dominating the income effect’ in the decision of females entering the labour market in rural India and shows empirically how it does not hold in the Indian context, thereby an attempt on debunking the mainstream theory. JEL Codes: J10, J21, J64, C18