Rebecca Lewis, Partner and Co-CEO
In the 1960s and 1970s women’s participation in the workforce in the US increased significantly. Yes, expanding education supported and evolving societal mindsets had a part to play but it was the increased use of contraceptive pill that was particularly critical in reducing birthrates.
Birth rates in the US declined significantly from 3.0 to 1.7 over a matter of 12 years and this helped to catapult women into the workforce in increasing numbers. Like it or not, having children (I have two) is a huge headwind for women staying in the workforce. With the ‘working from home’ policies fading after COVID, for many it is as challenging as ever for women to balance work and family.
Source: World Bank Database (https://data.worldbank.org/)
Importantly, as an investor in emerging Asia, we have seen a similar drop in birth rates in India over the last 20 years, from 3.1 to 2.0. Alongside this we have also seen societal mindset gradually changing and education levels double; this is still not where it needs to be but 78% of girls enrolled in schools is a material improvement from a couple of decades ago.
Source: World Bank Database (https://data.worldbank.org/)
The changing outlook for Indian women is not just a theoretical concept. Thankfully we have seen the change on the ground. Government data shows that 5 out of 6 new jobs created over the last 5 years in India went to women[1]. We didn’t believe this number when we say it either, but it actually does reflect our experience meeting with companies on the ground that have improved infrastructure so women can be employed. Seven years ago when I asked a company in India why they didn’t employ any women they said they didn’t have a bathroom. Now companies even have female-only factories.
As consumer investors we have also seen the changes happening on the shop floor. In retail stores, five years ago only 2 out of 10 jobs went to women whilst today this number is 4 out of 10. Some things aren’t changing quickly but it is clear women are working more than ever.
Share of jobs by sector and gender in India
Source: Period Labour Force Survey Annual Report 2022-23, Arisaig analysis
As human beings we think this is a good thing but as consumer investors this matters, too. Households where the women work spend differently. Not only do incomes overall rise but women start to spend a little more on themselves, not just on their husbands and their children. This is often taking place under the watchful eye of their parents-in-law, whom nearly 70% of Indian women live with. We estimate that an Indian woman who works spends 3 to 4 times more on herself if she works.
As we continue to invest behind consumer categories that grow faster than incomes, we are paying particular attention to those that serve women. This means businesses that sell sanitary towels, apparel, leggings, and cosmetics are a core part of our India exposure. In addition, these societal changes support the growth of our formal retail exposure. Women who work have less time to shop around and are more likely to use a supermarket which provides the convenience of a wide variety of products available under one roof.
Everyone knows that a more equal world makes sense, and moving towards this can feel painfully slow. The good news for us as investors is we can invest behind this transition now in India now and be rewarded as it progress continues.
[1] Period Labour Force Survey Annual report 2022-23.
