The labour market dilemma of young urban women in India: An outcome of family welfare optimization

Abstract

This paper uses a theoretical model to explain the patterns and determinants of labour market participation behaviour of young urban women in India. Based on the National Sample Survey (NSS) data and through probit regression results, it argues that the labour market participation decision of young women is an outcome of the joint utility maximization behaviour of their family. The standard of living of the family, market wage, other family characteristics, including the number of children, adult women in the family, elderly members, and occupation, and gender of the head, etc., are significantly determining their labour market participation; apart from women’s individual characteristics like age (experience) and level of education and training. The empirical result also reflects that the “discouraged worker effect” is stronger than the “added worker phenomenon”. Hence, measures to create jobs in modern services could help boost the stagnant female labour force participation in urban India.