Despite slowdown, India could achieve double-digit growth with more jobs for women

The numbers just came in , and India’s economic growth rate is the lowest it’s been in two years. But according to a new report by the World Bank, it could achieve double-digit growth if it brings large numbers of women into the workforce with “safe, flexible and well-paying jobs.”

According to the report, India has one of the lowest rates of female labor force participation in the world – ranked 120 out of 131 countries in 2013 by the International Labor Organization. Worse, it’s been in decline.

In 2004-05, 37 percent of working age women (15 years and older) were working or actively looking for a job. That was already 10 to 15 percentage points lower than the expected rate for India’s income level. But by 2011-12, that rate dropped to 27 percent.

It’s low compared to countries with similar income levels, and it’s low compared to its neighbors such as Bangladesh, Sri Lanka and Nepal. And despite the fact that 42 percent of India’s science and technology graduates are women, the declining trend of labor force participation is sadly consistent.

That’s significant “brain drain” for modern services sectors. But according to the report, if India just closed half the participation rate gap with Nepal – which boasts 83 percent women’s labor force participation – it could boost the gross domestic product (GDP) growth rate to more than 9 percent by 2020. Just closing half the gap with the level of participation expected for India’s income level could increase potential GDP growth by up to a full percentage point.

These estimates are based on projections of India as the fastest growing major economy – a title it proudly held until the Central Statistics Office announced this morning that India’s GDP growth during the January to March quarter was a mere 6.1 percent.

But to sustain that growth, India needs to revive private investment and increasing women’s participation in the workforce can contribute significantly, as well. In addition, putting more women to work can reduce poverty and generate more equitable prosperity. It also has important social benefits, such as increasing the bargaining and decision-making power of women in households, creating greater mobility for women and improving the health and nutrition of women and children.

“Women benefit from their economic empowerment, and so too can their men, children and society as a whole,” the report said. “The case for India getting more of its women in the labor force is thus not only ‘the right thing to do’ but also ‘smart economics.’”

So what is keeping women in India from finding jobs? The main issue, according to the report, is limited job creation overall. One great way to create safe, flexible jobs jobs for women? Invest in women entrepreneurs who tend to hire more women.

Source: Humanosphere