Gender Pay Gap in India’s Formal Sector: Women and the Labour Market

Abstract

Gender diversity and its consequences in relation to work and economy are much discussed topics in India today. Women constitute almost half the population of India (48%) (Census India, 2011) and thus half of its potential labour force. But the LFPR of women in India has been constantly declining and stands at merely 28.6% for 2014 (The World Bank, 2016). This implies that half of the potential talent base in India is under-utilized (Zahidi & Ibarra, 2010). Though the Indian Government has taken various measures to prevent discrimination against women workers, there still exists a wide gender pay gap in India and in fact no country has been able to close the gender pay gap completely (Tijdens and Klaveren, 2012). The issue of wage inequality is also central to United Nations’ SDGs, “decent work for all women and men, and lower inequality, as among the key objectives of a new universal policy”, which highlight the importance of measuring and devising a mechanism to reduce the pay gap (ILO, 2016).

This paper quantifies the magnitude of gender-based disparities that women face in the organized sector of the Indian Labour Market, offers possible explanations for the same and tracks changes over time. Using the WageIndicator (Paycheck.in) continuous and voluntary web salary survey dataset and OLS regression analysis (Blau and Kahn, 2016), the paper identifies the key drivers, trends and reasons of the gender pay gap in the Indian labour market. Key findings include that gender pay gap increases with age, education and skill, occupational status and is significantly higher for married women than single women.

To survive in an ever-changing world, in terms of political, economic, social, technological, environmental and legal aspects is the challenge of each passing day. Moreover, to be able to subsist in a dynamic environment, there is a need for a new mind-set that can discard old prejudices and inertia, and accept new ideas and solutions (Hausmann, Tyson, & Zahidi, 2011). The paper explores and expands on the different approaches used by various organizations to counter the gender pay gap. We conclude by providing several concrete and innovative policy recommendations on how to enable Indian women and men to overcome gendered barriers in the labour market