Women-headed households in India are increasingly moving into better quality and more secure employment, marking a significant shift in the country’s labour market dynamics, according to a first-of-its-kind employment study by SBI Research that analysed unit-level data from India’s latest Periodic Labour Force Survey (PLFS)-2025.
The study, titled “How India Works Today: Insights into Wages, Skills, and Informal Employment through the Lens of PLFS 2025,” revealed that women-led households are associated with a 4.4 per cent higher probability of being employed in regular wage or salaried jobs, widely considered a stronger indicator of employment quality, while their likelihood of being engaged in casual labour drops by 4.2 per cent, with no significant change in self-employment.
Researchers said the trend signals a movement towards more stable and protected work as women gain greater economic autonomy, bargaining power and decision-making authority within households. They examined raw PLFS microdata from 2.7 lakh households and over 11.48 lakh individuals to analyse how gender, education, social identity, geography, industrial structure and economic decision-making power are reshaping employment patterns across the country.
In rural India, women’s household headship reduces the probability of casual labour by 5 per cent while leading to modest gains in both self-employment and regular wage work. However, the effect is sharper in urban India, with household headship associated with a 10 per cent increase in regular wage employment and an 8 per cent decline in self-employment. The findings suggest that greater bargaining power translates into better employment outcomes, but the form of that gain depends on the structure and opportunities available in local labour markets.
The study found that education transforms women’s employment in a distinctly non-linear manner. Among non-literate women, the probability of being engaged in casual labour stands at 0.21, but this steadily declines to 0.12 among women with middle-to-secondary education, indicating that education helps women exit the most vulnerable segment of the labour market.
“India’s labour force is undergoing structural transformation, with the share of agriculture in the workforce witnessing a modest 23 per cent decline from 66 per cent in 1987-88 to 43 per cent in 2023-24 over a 37-year period. Large enterprises (more than 20 workers) now employ 13.7 per cent of the workforce, significantly higher than 10.8 per cent in 2024 due to the government’s renewed push on manufacturing,” the study report said.
One of the more concerning findings of the study relates to wage compliance. At least 25 per cent of casual workers in India earned wages below the statutory minimum wage, indicating significant enforcement gaps and weak labour protection. Chhattisgarh recorded the highest incidence of underpayment at 70 per cent, followed by Odisha at 66 per cent and Jharkhand at 65 per cent. Maharashtra and West Bengal also reported nearly one-third of casual workers receiving wages below mandated minimum levels.
The study uncovered stark gender disparities in wage compliance. Female workers account for 45 per cent of all underpaid casual workers despite constituting only 25 per cent of the casual workforce. Male workers, by comparison, account for 55 per cent of underpaid workers while making up 75 per cent of the workforce, indicating that women remain disproportionately vulnerable to wage violations.
The SBI research revealed that social identity continues to shape labour market vulnerability. Women from scheduled tribe (ST), scheduled caste (SC) and other backward class (OBC) households are significantly less likely to be self-employed and significantly more likely to be engaged in casual labour.
“The casual labour premium is strongest for SC women at 14.5 per cent, followed by ST women at 12.1 per cent. At the same time, SC women are the only group with a statistically significant regular-wage premium of 5.4 per cent,” the study report stated, describing it as a polarised employment structure.
Beyond gender, the report paints a broader picture of India’s labour market. State-wise analysis of unemployment among people aged 15 years and above shows wide regional disparities. Goa recorded the highest unemployment rate at 8.3 per cent, followed by Nagaland at 6.7 per cent, Arunachal Pradesh at 6.6 per cent, Punjab at 5.3 per cent and Telangana at 5 per cent, well above the national average of 3.1 per cent.
In contrast, Gujarat reported the lowest unemployment rate at 0.9 per cent, followed by Madhya Pradesh at 1.5 per cent and Karnataka and Chhattisgarh at 2.3 per cent each, indicating stronger labour absorption and employment generation capacity.
However, youth unemployment in the 15-24 age group declined from 10.9 per cent in PLFS 2022 to 10.3 per cent in 2024 and further to 9.9 per cent in 2025. Yet the rural-urban divide remains stark. Urban youth unemployment declined from 16.8 per cent in 2022 to 14.3 per cent in 2024, but remains substantially higher than rural youth unemployment, which has stayed broadly stable at around 8-9 per cent.
Young women continue to face greater labour market barriers as female youth unemployment, which fell from 11.6 per cent in 2022 to 10.3 per cent in 2023, rose again to 11.1 per cent in 2024 and further to 11.3 per cent in 2025, indicating weaker and uneven improvement in employment opportunities for young women.
In terms of employment quality, states such as Karnataka, Tamil Nadu and Odisha perform strongly in both labour force participation and employment quality. In contrast, Uttar Pradesh, Bihar and Punjab show lower participation as well as weaker worker quality indices. Rajasthan and Chhattisgarh present a different challenge, with higher labour force participation but lower employment quality.
Industry-wise analysis reveals that casual labour for both men and women remains concentrated in construction, followed by agriculture. In mining and industrial sectors, the share of female workers in regular wage employment remains very low compared to men. Interestingly, in transport-related sectors, female employment under regular wage arrangements is significantly higher than that of men.
The study further underlined the overwhelming dominance of informality in India’s labour market, with between 80 and 90 per cent of the workforce engaged in informal employment. Punjab recorded the highest share of informal workers at 82 per cent, followed by Uttar Pradesh and Bihar at 81 per cent each. Rajasthan, Chhattisgarh, Andhra Pradesh and Madhya Pradesh also reported high levels of informality, with nearly 74 per cent of workers engaged in informal jobs.
In contrast, states with relatively diversified industrial and service economies such as Haryana, Tamil Nadu, Telangana and Karnataka show comparatively lower levels of informal employment. Researchers said the persistence of informal employment across all states underscores the urgent need for workforce formalisation and expansion of social security coverage.
Informal employment remains predominantly rural, with nearly 59 per cent of informal workers concentrated in rural areas compared with 41 per cent in urban centres. Urban workers are 4 per cent less likely to be employed informally than their rural counterparts.
Sectoral analysis shows agriculture remains the single largest source of informal employment, accounting for nearly 42 per cent of the informal workforce, followed by trade and hotels at 17 per cent and other services at 14 per cent.
Workers engaged in manufacturing are 32 per cent less likely to be in informal employment compared to agricultural workers, while those in services are 31 per cent less likely. Trade and hotel workers are 16 per cent less likely to be informal, whereas construction workers are 4.5 per cent more likely to remain in informal employment, the report stated.
Employment survey
The PLFS 2025 survey covered a total of 22,594 First Stage Units (FSUs) across India, comprising 12,441 villages in rural areas and 10,153 urban blocks.
A total of 2,70,472 households were surveyed under the study:
1,48,718 rural households
1,21,754 urban households
The survey enumerated 11,48,634 people across the country:
6,56,160 people were from rural areas
4,92,474 people were from urban areas
Among the total surveyed population, 8,91,266 people were aged 15 years and above, forming the core working-age population used for labour market analysis.
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