The southern state of Kerala in India is known for greater status of women and low gender bias in society. However, the social and human development in Kerala have not been congruent to the economic emancipation of women, and paradoxically, female labour force participation has been on the decline. This paper aims to examine the issues and understand the linkages to identify the possible determinants of the observed paradox. We have mainly used Census of India 1991 and 2001 and the successive rounds of National Family Health Survey (NFHS 1, 2 and 3) as our data source. Bivariate correlation analysis and multivariate logistic regression were done to understand the association between and relative contributions of significant predictor variables of female work force participation. As apparent, constriction of general economic opportunities in Kerala has an additional gender intensification. Internal migration, stagnant agricultural and industrial growth and a vibrant informal economy negates the positive effects of education and social status leading to constrained workforce participation of women. The paper takes a closer look at the existing bottlenecks hindering women’s economic activity in the state of Kerala and suggests possible policy actions, aiming at enhanced empowerment of women, in a favourable social setting.