Abstract:-

Women’s self-employment has expanded substantially in rural India over the past decade, particularly through own-account work (OAW). Between 2017–18 and 2023–24, the share of women engaged in OAW among all self-employed women rose from 7.83 per cent to 17.93 per cent, while women’s share of total own-account workers increased from 32.18 per cent to 41.65 per cent, indicating a marked shift towards independent economic activities. Despite this transformation, empirical evidence on whether women’s participation in OAW improves household economic well-being remains scarce.

Using unit-level data from the Periodic Labour Force Survey (PLFS) for 2017–18 to 2023–24, this study examines how women’s participation in OAW affects household monthly income and consumption expenditure. Unlike the existing literature, which has largely focused on women’s empowerment and subjective well-being, this paper evaluates the impact of OAW on objective measures of household economic well-being. To address potential endogeneity in women’s participation in OAW, the analysis employs an Instrumental Variable Two-Stage Least Squares (IV-2SLS) approach with cross-sectional data. The principal explanatory variable is a binary indicator of whether any woman in the household is engaged in own-account work, with controls for a comprehensive set of household, individual, and socio-economic characteristics.

The results indicate that women’s participation in own-account work significantly increases household income and consumption expenditure. The IV-2SLS estimates confirm that these positive effects remain robust after accounting for endogeneity. The findings underscore the importance of promoting women’s own-account entrepreneurship as a pathway to improving household economic well-being and suggest that policies supporting women’s access to productive assets, credit, and market opportunities can contribute to more inclusive and sustainable rural development.

(Jointly with Manmeet Kaur, IIFT- Kolkata)