India’s female entrepreneurs are playing a crucial role in increasing women’s participation in the workforce. A new study by researchers Gaurav Chiplunkar and Pinelopi Goldberg suggests that promoting female entrepreneurship could significantly boost the number of women in the labor force. The study found that female-led businesses often create more opportunities for other women.
In male-owned firms, only 23% of workers were women. However, female-owned businesses employ a much higher percentage of women. Over half of female-owned firms are also led by women, compared to just 6.5% of male-owned businesses.
Despite this potential, women’s contribution to India’s GDP is only 17%, less than half the global average. India ranks 57th out of 65 countries for women’s entrepreneurship. Women make up about 14% of entrepreneurs in India and own a significant share of micro, small, and medium enterprises (MSMEs).
Female-led businesses boost women’s participation
Most of these businesses are microenterprises, with many being single-person ventures. The researchers developed a framework to measure the barriers women face when entering the workforce and becoming entrepreneurs.
They found substantial obstacles to women’s employment and higher costs for female entrepreneurs when expanding their businesses. Simulations showed that removing these barriers would increase female-owned businesses, boost women’s workforce participation, and drive economic gains. Ashwini Deshpande of Ashoka University notes that women still face barriers such as limited access to safe transportation and childcare.
She emphasizes the need to increase women’s participation in regular salaried paid work with job contracts and social security benefits. Boosting female entrepreneurship could be a way to overcome these challenges. Policies that support female entrepreneurs and increase labor demand can be more effective than trying to change long-standing social norms.
By creating more opportunities for women, female-led businesses have the potential to drive significant economic growth in India.
