This paper reviews the literature on female labour force participation and women’s employment, with the aim of better understanding the drivers of labour market outcomes. This paper also attempts to explore the situation of women globally and in South Asia, through an examination of long-term trends of female employment. It goes further, explaining the reasons for the falling participation of women in the Indian labour market. In doing so, an econometric analysis has been carried out to understand the most important factors that may affect their probability of being in any of the various labour market outcomes, separately for the rural and urban labour markets in India. The findings reveal the importance of education, especially of post-secondary schooling.