Nithin Kamath, the founder of stockbroking platform Zerodha, recently delved into the topic of female labor force participation in India, highlighting its potential impact on the country’s economic growth and the intriguing patterns it has exhibited over the years.
What Happened: In a tweet, Kamath pointed out that empowering women to join the workforce is a clear path to boosting India’s economic growth. However, he said he didn’t understand why the female labor force participation rate (FLFP) in India fluctuated so much. From being in the vicinity of 30% in the 90s, it plummeted to 20% and then rebounded slightly to 24%.
Seeking insights on this topic, Kamath said that Ashutosh Datar, co-founder of India Data Hub, provided an enlightening perspective, explaining the U-shaped relationship between female labor participation and per capita GDP.
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At lower income levels, female employment is often driven by distress or necessity, Kamath said. As income levels rise, this distress-driven employment diminishes, leading to a decline in FLFP. However, as women re-enter the workforce voluntarily, the FLFP begins to rise again.
Why It Matters: Kamath’s emphasised the importance of creating an environment where women can participate in the workforce not out of distress but by choice, thereby contributing significantly to the nation’s economic progress.
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Editor’s Note: Artificial intelligence was used as a secondary aid in the writing of this story.
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