Thread by @zerodhamarkets

From Japan's demographic challenge, let's turn to India where the picture looks very different. The share of working women in India, particularly in manufacturing, has been stagnating.

This isn't just about diversity - higher female participation is key to economic development. 🧵👇

Women in India face barriers from family attitudes to workplace discrimination. But there's also a legal side. Many Indian laws actively prohibit women from some work - like night shifts. Delhi bans women from working after 9 PM in summer, 8 PM in winter.

The intention was women's safety, but this is increasingly seen as a systemic barrier to employment. Between 2016-2023, 8 Indian states including Gujarat and Karnataka changed this, amending laws to remove night-shift bans. The impacts were complex.

Most researchers look at poor female employment through supply-side factors - family responsibilities, safety fears. But night-shift bans are demand-side barriers. They make women less attractive to employers who have less legal flexibility deploying female workers.

These laws systematically excluded women from formal, well-paying jobs, especially in services. Consider India's GCCs - they offer well-paying call center, software development roles but need night shifts for global clients. Would you employ a woman under the old laws?

Or think hospitals - they need skilled nursing staff 24x7. These laws contain exceptions and grey areas, but they pose hiring hurdles for women that don't exist for men. When laws were removed, it tested how important this demand-side barrier really was.

Many women reallocated work time from day shifts to night shifts. Relative to men, women in services took up night shifts faster and more enthusiastically. But their total working hours didn't increase - they actually worked 12.2% fewer weekly hours.

For women with daytime caregiving responsibilities, night shifts offered better work-life balance. Night work also brings higher wages, allowing women to earn similar income while working fewer total hours. This was smart time reallocation, not just more work.

More women also got formal jobs. India's job market is filled with informal jobs lacking social security, contracts, or legal recourse. Women suffer informality's brunt far more than men, but reformed states saw change.

Women in reformed states were 8% more likely to have formal employment contracts. There's sound logic here: earlier, firms employed women for night shifts illegally, without formal contracts. Women worked nights anyway but had no labor protections.

Once night work became legal, employers had to offer new protections - safe transportation, better security. Women gained bargaining power too, leveraging their legal right to work nights to demand better employment terms. Another study found similar results in manufacturing.

But results weren't uniform. The reform didn't improve overall female employment rates or boost weekly wages for all women. Results were spread unevenly - different women affected differently based on where they lived, worked, and how much they already earned.

Geography mattered enormously. Benefits went almost entirely to large cities while smaller towns saw no difference. Infrastructure determines reform effectiveness. Companies must provide transport for night-shift women - easier in big cities, expensive in smaller towns.

Women in existing large, formal companies gained most. Big firms could absorb compliance costs easier and had efficient ways of employing women at scale. Small, informal firms found costs too expensive, leading them to avoid hiring women or reduce hours.

This created divided outcomes - urban, already-formalizing segments improved vastly, but women in small informal jobs saw no change. Reforms helped younger women from well-earning families in large companies - those with existing privilege and connections.

Safety emerged as crucial. In low-crime areas, reforms worked ideally - increased employment, higher wages, reduced hours. But in unsafe environments, reforms backfired completely, actually bringing decline in female employment as women withdrew rather than risk night work.

Safety isn't just social good - it's essential economic infrastructure. Social norms matter equally. In states turning blind eye to domestic violence, reforms changed little. These patriarchal areas lacked "social permission" for women to work formally, let alone at night.

Legal reforms are necessary but not sufficient. States need safety as economic policy, better urban planning, and support for small firms through credits or subsidies. Legal equality is just the starting point - without holistic approach, good laws can worsen inequalities.

We cover this and one more interesting story in today's edition of The Daily Brief. Watch on YouTube, read on Substack, or listen on Spotify, Apple Podcasts, or wherever you get your podcasts.

All links here: thedailybrief.zerodha.com/p/japan-and-th…