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Summary This paper explores the recent fall in female labour force participation and its socio-economic determinants in India. The major contribution of this paper is: to explore both micro- and macro-level factors which determine female labour force participation rate (LFPR); to examine the “U shape” female LFPR, by examining the likely income and substitution effects of the real wage increase, to identify the sub-sectors within manufacturing and service sectors that could create jobs for new female job aspirants and those older women displaced from agriculture in recent years; and thus to understand the conditions under which female LFPR could be raised. Using both macro-level and household survey (NSS) data, we find that the recent fillip in the process of structural transformation has pushed a large number of females out of agriculture. The growing mechanization in agriculture and rising capital intensity in manufacturing sectors together have limited the opportunity for females because of their low education and skill and due to other cultural constraints. We also found that the rise in real wages in rural areas and the consequent improvement in the standard of living has produced a strong negative income effect which outweighs the positive substitution effect and as a result female LFPR has declined substantially. However, with the massive increase in female enrollment in secondary and higher levels of education, it could be expected that the substitution effect of the increase in real wage would become stronger if appropriate measures are taken by the government, which are suggested. [ABSTRACT FROM AUTHOR]

Summary: There has been an increasing “informalization” and “feminization” of the labor force in developing countries over the past few decades. One aspect of these twin phenomena is the growth of subcontracted homework in manufacturing. Homework has a dual and contradictory character: It can be the source of exploitation of workers, but under some conditions, it can foster human development and the emergence of microenterprises and promote local development. This paper draws on surveys carried out in two low-income South Asian countries—India and Pakistan—where homework is widespread. It examines the social protection needs of these women workers, and also argues for public action to promote such work as a possible new labor-intensive growth strategy in developing countries. [Copyright &y& Elsevier]