ABSTRACT
One of the greatest puzzles in Indian labor market trends in recent years is that while the economy has recorded a high growth rate of more than 6%–7% for the past 15 years, the labor participation rate of women has decreased. In particular, in Bihar, one of India’s fastest-growing states, the decrease in the female labor force participation rate is significant in rural areas, while its economy has recorded remarkable growth, with growth rates sometimes better than those of India as a whole over the same period. While female labor force participation rate in urban areas decreased from 14.8% to 13.4% in India overall and in rural areas from 24.9% to 18.1% in 2004 and 2011, respectively, Bihar recorded a drop from 6.8% to 5.4% in urban areas and a significant drop from 13.8% to 5.8% in rural areas in the same time period. While women tend to engage in activities that are not captured or recorded in labor statistics such as domestic work, women’s participation in the labor market would positively affect the national and state economy, and their earnings could also serve to promote women’s empowerment; overall, women’s labor force participation may be important for rectifying inequality between men and women. As the economy has recorded particularly strong growth, the central question is why the labor force participation rate of women has declined in Bihar.
