In absolute terms, India’s labor force has shrunk from 445 million to 435 million in six years. Currently, approximately 1,085 million Indians are over the age of 15 and legally employable
In absolute terms, India’s labor force has shrunk from 445 million to 435 million in six years. Currently, approximately 1,085 million Indians are over the age of 15 and legally employable
Only 40% of Indians of legal working age were employed or looking for a job in 2021-22. In comparison, the 2016-17 labor force participation rate was over 46%, according to the Center for Monitoring Indian Economy.
In absolute terms, India’s labor force has shrunk from around 445 million to 435 million in six years. Currently, approximately 1,085 million Indians are over the age of 15 and legally employable.
The labor market participation of women, who in any case only make up a small part of the labor force, has continued to decline. In 2016-17, around 15% of women were employed or looking for a job. This metric fell to 9.2% in 2021-22. The participation rate for men fell from over 74% to 67%.
The decline in the labor force participation rate was greater in urban areas than in rural parts of the country. In urban areas, the rate fell from 44.7% to 37.5% – a drop of more than seven percentage points. In rural areas, the figure dropped from 46.9% to 41.4%.
State-by-state analysis shows that 23 of the 24 states with data saw participation rates decrease in March 2022 compared to March 2016. The rate fell in all states except Rajasthan. The decline was stronger in two southern states, which initially had a high participation rate.
Andhra Pradesh and Tamil Nadu, whose participation rates were 54% and 56% respectively in March 2016 – then occupying the top two spots – also saw the largest declines. Between 2016 and 2022, the participation rate fell by 20 percentage points and 17 percentage points for Tamil Nadu and Andhra Pradesh, respectively – the largest falls among all states.
