An SBI Research report reveals a structural upgrade in India's female labour market. Education, household agency, and social mobility are driving a shift from casual to regular wage employment, signaling a more resilient workforce ahead.
India's female labour market may be on the cusp of a structural upgrade, with education, household agency and social mobility driving a gradual shift from casual to regular wage employment, a research report by SBI Research showed. The trend points to a more resilient workforce in the coming years, even as disparities across education levels, geography and social groups persist.
Impact of Household Agency
SBI Research's unit-level analysis using a multinomial logit model shows that female household heads have a 4.4 per cent higher probability of being in regular wage work and a 4.2 per cent lower probability of being in casual labour, with little change in self-employment.
The pattern is more pronounced in urban areas, where headship is linked to a 10 per cent rise in regular wage work and an 8 per cent drop in self-employment. In rural areas, headship reduces casual labour by 5 per cent while modestly improving both self-employment and regular wage work.
The findings indicate that greater agency and bargaining power within households are translating into more stable employment outcomes, though the form varies by local labour markets.
Education as a Key Driver
SBI Research found that education de-casualises women's work first, and regularises it only beyond a threshold. Among non-literate women, the probability of casual labour stands at 0.21, falling to 0.12 for those with middle-to-secondary education.
The decisive shift comes at higher secondary and above, where the probability of regular wage work jumps to 0.44, casual labour drops to 0.03, and self-employment recedes. This suggests that expanding access to higher education will be critical for creating durable, salaried opportunities for women.
Social Background and Labour Market Segmentation
Social background also shapes outcomes in a polarised way. Relative to the "Others" group, SC women have a 5.4 per cent higher probability of being in regular wage work, the only group with a statistically significant premium, but they also face the highest exposure to casual labour at +14.5 per cent. Women from Scheduled Tribe and Other Backwards Classes show similar patterns of reduced self-employment and higher casualisation, highlighting segmentation in the labour market.
Industry-Specific Contrasts
Industry composition reveals further contrasts. While casual labour remains concentrated in construction and agriculture for both men and women, women outperform men in securing regular wage work in transport. In mining and industry, however, the share of women in regular wage employment remains significantly lower than that of men.
Future Outlook and Policy Focus
Looking ahead, SBI Research's results imply that India's female employment quality will improve most where education levels rise, and women gain household decision-making power. Policy focus on secondary and higher education, coupled with targeted skilling and urban job creation, could accelerate this transition. At the same time, addressing the polarised outcomes for SC, ST and OBC women will be essential to ensure that gains are broad-based rather than concentrated among a narrow segment.
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