India will soon surpass China to become the world’s most populous country. But by some projections its labor force will not exceed China’s until mid-century. One reason is that so few women in India are working. The female labor force participation was only 20.52% in 2019, compared with 60.6% in China. While cultural preference and social attitude do hold women back in India, they are not irreversible. The Indian government has adopted some helpful reforms1 .

a. The government has adopted new factory rules that will ease restrictions on women’s working hours. It should make each female labor more appealing recruits to the firms, because each woman worker will be allowed to work for longer hours. Besides, the government has cut the corporate taxes significantly from 35% to 25.2%, with a discounted rate of 17.2% for manufacturers. It will particularly help the labor-intensive, female-friendly industries such as the garment industry.

Based on the classical model, explain, with an aid of a diagram, how these reforms would affect the labor market and the country’s long-run output level. 

b. But economists generally believe more could be done. While India's rural workforce scheme provides flexible employment to many women, it should pay wages directly to women rather than to households. A study by Erica Field of Duke University showed that giving women control over their wages increased their bargaining power with their husbands, which in turn won them more freedom to choose to work. Explain, with an aid of a separate diagram, how paying wages directly to women would affect the labor market and the country's long-run output level.

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A Suppose the government has adopted a new factory role that will he is restrictions on womens worki... View the full answer