India’s painful “shecession”

The COVID-19 pandemic and related lockdowns have disproportionately impacted women. Across the world, women have experienced a larger rise in unemployment than men and an increase in carer responsibilities.

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In the US, women have not only lost jobs but their labour force participation has also declined, leading the Institute of Women’s Policy Research (IWPR) to label the current crisis a “shecession”.

"In India, for every 36 minutes of unpaid care work a man does, a woman will do more than six hours. This is the highest gender disparity in the OECD’s 33 economies.” - OECD India’s labour market data lag and are less detailed but there are signs of growing economic distress among its women.

According to policy research institutes, job losses for women have been more pronounced than for men. Women’s employment is also concentrated in pandemic-impacted sectors, particularly service activities such as hospitality and education. With social distancing likely to be the norm for some while, the situation could take a considerable time to improve.

What makes the Indian situation worse is that, relative to their international counterparts, Indian women are already greatly underrepresented in the workforce and face considerable wage disparity.

Low labour force participation

Even before the COVID-19 pandemic, India’s female labour force participation rate (LFPR) was one of the lowest in the world. Compared with the world average of 47.1 per cent, India’s LFPR was just 20.5 per cent in 2019, which impacts India’s ability to rise.

That situation is worsening.

In just over a decade, the LFPR for women in rural areas halved to 24.6 per cent (2017-18) from 49.4 per cent (2004-05). The ratio is 20.4 per cent (2017-18) for urban women. Some structural factors explain this decline. A rise in household incomes has discouraged many women from casual/helper work. Limited opportunities, the need for jobs near home and lack of reskilling facilities to prepare for non-farm jobs have also led to the withdrawal of many rural women from the labour force.

Gender wage gap

While fewer women in India have been seeking work, many who are in work are stuck in low-growth, low-productivity sectors.

A 2019 Periodic Labour Force Survey by the Ministry of Statistics and Program Implementation showed the largest source of employment for rural women is self-employment (58 per cent), followed by casual labour (32 per cent). Women working in urban areas are concentrated in service roles, such as teaching, nursing and hospitality, which offer few career progression pathways and limited earning capacity.

There has been some improvement in India’s gender wage gap - the International Labour Organisation estimates India’s gender wage gap has declined to 34 per cent (2011-12) from 48 per cent in 1993-94.

But a gender pay gap of 34 per cent still means that, on average, women receive only 66 per cent of what men receive for doing the same job. The gap ranges from 22 per cent to 39 per cent, depending on whether the role is in an urban or a rural location and whether it is regular or casual. To put that into a global context, the World Economic Forum’s Global Gender Gap Index 2020 ranks India 112th of 153 countries.

The pandemic is likely to worsen this wage disparity.

As factories and households adhere to the lockdowns and social distancing, the demand for labour and domestic workers will inevitably decline. Contract and informal workers are likely to struggle to find income sources.

While there are no early indicators of layoff/furlough numbers, it is reasonable to assume women will face an outsized impact given their concentration in pandemic-impacted sectors.

More time caring

The unpaid work of caring for children, the elderly and the ill is most often done by women, alongside the daily running of households.

The Organisation for Economic Co-operation and Development (OECD) estimates that, in India, for every 36 minutes of unpaid care work a man does, a woman will do more than six hours. This is the highest gender disparity in the OECD’s 33 economies.

School closures under lockdown have added home-schooling to family responsibilities. For many women, that challenge is compounded by the diverse needs of dependents of different ages, from elderly parents to very young children.

The increased care workload puts pressure on both work and private life, leading many women to seek additional leave or more flexible work arrangements. When that is not possible, many have little choice but to withdraw from the labour market

Mental health concerns

Mental illness diagnoses in India are, on average, slightly higher for women than men. For anxiety and depression, the disparity is even greater. Gender discrimination, abuse and adverse socio-cultural norms may all play a part in these conditions.

The COVID-19 pandemic brings with it added burdens of fear, loss of freedom, domestic tension and, for many, financial insecurity. As a result, it is very likely to exacerbate mental illness issues.

Domestic violence

The National Family Health Survey found over a third of women in India experienced violence from their spouse. The lockdown has reportedly increased instances of gender-related abuse.

The National Commission for Women has noted an increasing number of domestic violence complaints and the difficulties women face in accessing support systems under lockdown. Encouragingly, state-level cells of the Commission are facilitating dedicated WhatsApp helpline numbers and one-stop centres to provide medical, legal and counselling support.

Addressing disadvantages

In many ways, the pandemic has exposed or deepened existing inequalities.

The Secretary General of the United Nations, António Guterres, is concerned it could reverse the progress made towards gender equality. The National Council of Applied Economic Research, an economic policy research institute, estimates that women are likely to suffer greater losses from the pandemic.

The vast socio-economic impact of this crisis needs a gender lens and policy responses that factor in pre-existing levels of inequality.

The OECD has recommended policies to help alleviate these problems, including:

  • expanding flexible working options;
  • financial support and help with the cost of alternative care; and
  • incentivising employers who aid employees.

India’s pandemic-related stimulus package has, so far, included a few measures targeted at low-income women, such as the expansion of collateral free loans and the introduction of monthly cash transfers. These are welcome but only tiny steps.

There is a dire need to ensure policies aimed at support or recovery take a broader and longer view of the lasting damage this shecession is likely to cause, in order to optimise outcomes.

Bansi Madhavani is Economist and Sanjay Mathur is Chief Economist Southeast Asia & India at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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