Falling female labour force participation in Kerala: Empirical evidence of discouragement

India’s female employment and labour force participation have been declining since the mid-2000s. Kerala, traditionally its best-performing state on these indicators, has done worse than the country as a whole. This article examines the shifts that occurred in Kerala’s female employment and participation between 2004 and 2012, by household income level, age group, level of education and occupational category. Those dropping out of the labour market are typically young, educated women qualified for professional occupations, suggesting a discouragement effect exacerbated by widening gender pay differentials in top occupations. These shifts have obliterated some of the hitherto defining features of Kerala’s labour market. A disquieting feature of the labour market in India – and in South Asia more generally – has been the relatively low labour force participation of women, and its further decline in recent years. Studies on the region point to an array of complex, often interconnected forces driving female labour force participation down, including not only socio-cultural norms, but also economic, human capital and demographic determinants. Against this background, this article examines the changing labour market dynamics of female employment in urban Kerala. Kerala makes an interesting case study indeed. On the strength of its historically impressive accomplishments in social and human development, this state in south-western India gained a place of prominence in the development discourse as the “Kerala model of development” (UN-DESA, 1975). Its performance on indicators of human well-being was not only far ahead of the International Labour Review 498 national averages despite its slower economic growth, but also comparable with that of many middle-income countries.1 While Kerala’s development trajectory thus deviated from the conventional path of economic growth leading to human development, it had in fact been conditioned by a wide range of unique socio-political, cultural and historical processes.2 Their development outcomes are still reflected in the state’s low levels of infant mortality, long life expectancy, high levels of literacy, a sex ratio favourable to females, and low population growth (currently below the replacement rate). These accomplishments were hailed as a classic case of “welfare by public intervention” (Sato, 2004), whereby public action and state provisioning of public goods and basic needs offered an alternative path towards social development, despite low economic growth (Drèze and Sen, 1997). These socio-demographic advances created an environment conducive to women’s entry into the paid activities in the market on a considerable scale. While their educational attainments equipped them to seek work in highly paid service occupations, the state’s socio-demographic progress provided further stimulus to their labour market attachment. This resulted in remarkably high rates of female labour force participation, particularly among higher educated women, by comparison with the rest of the country. Even among higher educated women across India, participation was lower, highlighting the influence of factors other than education and earnings in determining women’s economic decisions. Since 2004, however, female labour force participation in Kerala has trended downwards, as it has done throughout India. Comparatively, it is the magnitude of the decline and its spread across the female workforce that set Kerala apart. In an attempt to understand the dynamics underlying Kerala’s departure from its long-term trend of high female labour force participation, the remainder of this article is organized into five sections. The first provides some background that contextualizes recent labour market developments, and the second briefly presents the data sources and concepts used in the study. The third section comparatively examines the compositional shifts in female employment and labour force participation in India and Kerala by level of household expenditure, educational attainment, and age, while the fourth section analyses the occupational characteristics of Kerala’s female employment. The fifth section concludes with a summary of the study’s main findings. 1 In the absence of strong economic growth to sustain its social development and welfare policies, debates were raised on the sustainability of the Kerala model in the long run. Kerala’s experience was thus referred to as a “paradox of development”, the “paradox of social development and economic backwardness”, “lopsided development” and so on (Chakraborty, 2005; George, 1998; Government of Kerala, 2006; Kannan, 2005; Panikar and Soman, 1984; Tharamangalam, 1998). Such concerns abated when Kerala’s economy started to gain momentum in the 1980s (Ahluwalia, 2002; Chakraborty, 2005; Government of Kerala, 2006; Jeromi, 2003; Kannan, 2005; Pushpangadan, 2003). By the 1990s, however, Kerala had embarked on a high-growth phase which peaked in the 2000s, when its economy grew at a rate higher than the national average. 2 For a detailed historical account, see Ramachandran (1997). Falling female labour force participation in Kerala 499