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MARCH 2026

Comparison with Asian

Counterparts U-shaped female labour force
participation hypothesis
Applying the U-shaped hypothesis of female labour
supply, it can be argued that female LFPR will be high in The U-shaped hypothesis of female labour force
low-income countries, will decline as per capita income participation explains how women’s engagement in the
begins to rise, and will increase again for the high-income workforce changes as a country’s economy develops. In
countries. However, a comparison of India with its Asian the early stages of development, when incomes are low
counterparts reveals a different pattern. Countries with and agriculture dominates, women’s participation in paid
comparable economic profiles - such as Bangladesh and work is high out of necessity - they contribute to
Philippines - have managed to sustain significantly higher subsistence farming, family enterprises, or informal
female labour force participation rates, despite similar labour. As household incomes rise and economies shift
per-capita GDP. For instance, female LFPR in towards industry and services, many women withdraw
Bangladesh and Philippines is at 39 per cent and 51 per from the labour force due to social norms, increased
cent respectively whereas for India, it stands at 32 per household prosperity, and the decline of home-based
cent (Figure 2). In contrast, male LFPR remains relatively work - causing participation rates to fall, forming the
consistent across these nations, underscoring that downward slope of the “U.” However, at higher levels of
India’s gender gap in labour participation cannot be economic development, female education, urbanisation,
explained by income levels alone. and the expansion of white-collar and service-sector
jobs create new, socially acceptable employment
opportunities for women. This leads to a renewed rise in
women’s participation, forming the upward part of the “U.”

One factor contributing to India’s low female labour force
participation is that the structural shift away from agriculture
has not been accompanied by equivalent female
employment in non-farm sectors, particularly in
labour-intensive manufacturing. In contrast, countries with
robust manufacturing and export-oriented sectors - such as
Bangladesh and Viet Nam - tend to absorb a larger share of
female labour, highlighting the role of sectoral composition
and employment opportunities in shaping women’s
participation in the workforce.

Figure 2: Female LFPR in India is Lowest among its Asian Counterparts

100.0 50,000
77.6 80.6 82.3 75.4 77.7
80.0 72.5 70.3 40,000

60.0 68.9 30,000
59.4 59.5
53.6
40.0 50.5 20,000
38.7
32.4
20.0 23,846 10,000
9,818 8,487 10,376 14,470 21,741 14,415
0.0
India Bangladesh Philippines Indonesia China Thailand Viet Nam

GDP per capita - PPP$ (RHS) Female LFPR (LHS) Male LFPR (LHS)

Source: World Development Indicators, World Bank 1
Note: The above data is for the year 2024

1 Databank, World Development Indicators, World Bank
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