Achyuta Adhvaryu, What Are You Thinking About?
INTERVIEWED BY TERRY KOSDROSKY
India has enjoyed rapid economic growth over the past two decades. But it's lagging behind in one important dimension, and the reason is a bit of a mystery. Achyuta Adhvaryu, professor of business economics and public policy, is looking at ways India can improve on this score, raise firm profits, and better society in general.
Q: What Are You Thinking About?
A: Retaining Women Workers in India
One consistent pattern of economic development is that as income levels rise, female labor force participation increases. We see this trend both when comparing countries with disparate income levels as well as within countries over time. But in India, where we've seen fairly rapid income growth and increased schooling over the last two decades, the number of working women has actually declined. It's the richest country in South Asia, but the rate of Indian female workforce participation is about 27 percent, down from 37 percent a decade ago.
This is important because when women work it has all kinds of economic and social benefits — higher household incomes, more gender equality and less domestic abuse, health and educational improvements for children, and so forth. So why hasn't India been able to retain women in the workforce?
I study the garment export industry, supposedly one of the few sectors bucking this trend. But even in garments, where four out of every five employees are women, we see massive attrition — more than 150 percent annually in the factories I study. Why are women so likely to leave? I'm researching the unique constraints women in these jobs face. We're looking at ways companies can help female employees navigate issues in the workplace and at home, offering support and training intended to increase their chances of staying in the labor force long-term and ultimately raising their satisfaction and standard of living.
Why is this interesting to you?
Because the welfare of women is strongly tied to future growth. When you give women more income, more information, and more control over resources, they tend to direct that toward the betterment of their children. That generates higher education rates, a more stable society, and more economic growth. So helping women stay in the labor force has effects well beyond individual and household welfare, though of course I care about that deeply, as well. The garment industry is as good a place as any to start, given the gendered employment in that sector.
What are the implications for industry?
I think any industry that employs mostly women and has high attrition rates should look at ways it can create stable, long-term careers for employees. If the firm is successful in retaining its employees, that's a win-win for industry as well as society. On the policy side, governments are, with good reason, very attuned to gender biases in workforce participation and compensation. In the U.S. and much of Western Europe, we have high rates of female participation but large gender wage gaps, so our policy mainly focuses on reducing this gap. If my research helps to find ways to improve retention for female workers in lower-income country contexts, the hope is that governments might be willing to subsidize those programs.