Research Projects

Women in the Indian labor market not only get paid less but also work signi?cantly less than men. A puzzle for researchers interested in gender equality in India is the decline in female labor force participation in the face of favorable trends in the correlates that have historically encouraged the entry of women into the labor force. These include increases in education and declines in fertility. Education makes participation in the dynamic and expanding sectors of an economy more lucrative while lower fertility rates reduce the time needed for the care of children. Female labor force participation rate in India declined from 32% in 2005 to 21% in 2018, while fertility systematically declined and primary and secondary enrollment increased. Our goal in this project is to understand the incentives and constraints women face in entering and staying in the labor market. Over the period of the grant we will use the tools of economic theory, large secondary pre-existing data sets as well as primary data from surveys and experiments in the field to throw light on the factors that determine the entry and exit of women from the labor market and changes in the hours worked. Theoretical work in this project will be based on a unitary household model where well-being of the members depends on income, leisure and the quality of care received by children. We use the model to make predictions about the relationship between the education of the adult woman in a household and her labor force participation decision. The cross-country literature on income and female labor force participation argues that there is a U-shaped relationship between the two, explained by the process of structural transformation and concomitant income growth. We show that it is not income per se but the costs of childcare relative to the returns to education that could generate this functional relationship at any given level of income. Our empirical work in the project will test insights obtained from our theoretical model. We will use multiple rounds of the Indian Human Development Survey (IHDS) to explore the effect of child bearing on the decision of women to work - both at the extensive margin (whether or not to enter the workforce) and the intensive margin (number of hours worked). By examining the rates of entry and exit of women from the labor market at different ages of their children, we can assess the types of institutional support which will help women combine work with home and child responsibilities. In addition to the theoretical and empirical project described above, we plan to collect and use primary data on time-use to compare the distribution of time spent at home by men and women in the household. We are also planning some field and policy experiments to study the effect of cultural norms on participation and whether making work more accessible from home or changing local options for childcare change participation rates.