Empowering Female Entrepreneurs: A Path to Boosting Women's Workforce Participation in India

A new study by Gaurav Chiplunkar from the University of Virginia and Pinelopi Goldberg from Yale University reveals that promoting female entrepreneurship is vital for improving women’s workforce participation in India. Despite representing half the population, women contribute only 17% to the nation’s GDP, significantly lower than the global average. This inconsistency highlights a pressing need to reevaluate the role of female-led businesses in driving economic growth and addressing gender disparities in the labor market.Globally, the World Bank has underscored the disparity, finding that women own less than 20% of businesses, a trend mirrored in India where female labor participation and entrepreneurship remain low. Over the last three decades, the percentage of women engaged in the workforce hasn’t grown significantly, whereas female entrepreneurs represent around 14% of the business landscape in India and substantially share the micro, small, and medium enterprises (MSMEs) sector. Yet, many such businesses are microenterprises, often involving only a single operator.Although women are not entirely absent from entrepreneurship, they typically run smaller businesses than men, particularly in informal sectors. The report also indicated that India ranks poorly in terms of female entrepreneurship, sitting at 57th out of 65 countries assessed by the Global Entrepreneurship Monitor Report 2021.The recent research indicates that female entrepreneurs tend to employ more women than their male counterparts, which could contribute to enhancing women's economic participation and productivity. The authors developed a framework to identify the barriers affecting women’s entry into the workforce and entrepreneurship, discovering significant hurdles such as access to childcare, safe transportation, and other socio-economic factors that discourage female employment.To combat these barriers, policymakers are encouraged to implement measures that foster female entrepreneurship. These policies could be more impactful and expedited than changing long-standing social norms. Ashwini Deshpande from Ashoka University emphasizes the necessity of shifting the focus toward regular salaried employment — jobs with contracts and social security — in order to enable true economic empowerment for women.Researchers conclude that opportunities for women in India are intrinsically tied to available job markets. While there has been a slight rise in women’s labor force participation, this gain largely resulted from self-employment rather than sustained salaried positions. The current trend indicates that many women have entered the workforce not through genuine opportunities, but through the necessity of survival.Moreover, a recent Barclays report suggests that ensuring women constitute over half of the new workforce could yield a potential GDP growth of 8% by 2030. Consequently, by nurturing female entrepreneurship, India may bridge the gender gap in labor participation while paving the way for substantial economic benefits.