Female Workers More Likely to be Engaged in Informal Employment, Says Working Paper

1. Women are 4.8 percentage points more likely to be in informal work.

2. Graduates are far less likely to be in informal employment than illiterate workers.

3. ICT adoption sharply improves productivity and enterprise registration.

Female workers are 4.8 percentage points more likely to be engaged in informal employment than male workers, reflecting the concentration of women in unpaid family labour, domestic work, and home-based productionwhere formal contracts are largely absent, according to a working paper by Economic Advisory Council to the Prime Minister (EAC-PM).

The EAC-PM in a working paper titled 'Formalization of Labour Market in India: Evidence from PLFS and ASUSE 2025 Unit-Level Data' further pointed out that education emerges as the strongest determinant of formal employment, with graduates and above being 43.8 percentage points less likely to be engaged in informal work than illiterate workers..

According to the paper, participation in training programmes further reduces the probability of informal employment by 4.8 percentage points, while among women, higher education substantially increases the likelihood of regular wage employment and reduces dependence on casual labour.

At the enterprise level, the paper said digital adoption is strongly associated with improved performance, with a one-unit increase in the ICT adoption index raising labour productivity by 76% and increasing the probability of enterprise registration by 83.4 percentage points.

The formalization benefits of ICT are particularly strong in urban areas (85.7 percentage points) and in service-sector enterprises (85.7 percentage points), it added.

The EAC-PC said enterprise registration is also associated with a 6.9 percentage-point higher probability of accessing formal credit, with positive effects observed across manufacturing, trade, and service activities.

While female proprietors remain 2.4 percentage points less likely to access formal credit than male proprietors, the report said registration increases the probability of formal credit access among women owned enterprises by 5.6 percentage points.

Finally, the paper highlighted the analytical value of integrating worker-side and enterprise-side surveys within a common empirical framework.

The paper presented an integrated empirical analysis of India's labour market and unincorporated enterprise sector using unit-level microdata from two national surveys: the Periodic Labour Force Survey (PLFS) 2025 and the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2025.