Chained To Chores: What's Eating Into Women's Earnings In India?
Let's start with a statistic many of us know, yet, one that should still startle us. The World Economic Forum finds that we are 132 years away from gender parity. For an Indian woman, this wait for parity will be much longer.
Unsurprisingly, as just a third of women participate in the labour force, 9% of top managers are women, and only 3% of firms have female majority ownership, India ranks 143 out of 146 countries on the economic prosperity and opportunity pillar of the WEF Global Gender Gap Index in 2022.
Moreover, Nikore Associates' research finds that Covid-19 led to a higher proportion of job losses, slower return to the workforce, and increased casualisation of women’s work. Even in January 2022, women’s labour force was 9.4% smaller than pre-Covid levels versus only 1.6% for men.
A recent report from WTW, a consulting firm, estimates a Gender Wealth Inequality Index which shows that across 39 major economies, women are only expected to earn about 74% of what men earn throughout the lifetime.
India has the highest gender wealth inequality in the Asia Pacific region and remains amongst the most skewed globally, as Indian women’s expected lifetime earnings are only 64% of their male counterparts.
Why Are Indian Women’s Lifetime Earnings Amongst The Lowest Globally?
First, historical factors prevented women from capitalising on economic opportunities created post-liberalisation.
Between 1987-88 to 2017-18, India witnessed a consistent decline in the female labour force participation rate, from 47% to 23%, particularly owing to an exodus of rural women. Even as men shifted to manufacturing and services, women were left behind in slow-growing, labour-intensive sectors that pay low wages.
Second, gender gaps in tertiary education and skill training created a duality in the labour markets.
The highest workforce participation is observed amongst post-graduate women in urban areas [37%], or non-literate women in rural areas [44%]. This has left a large missing middle of women out of the labour force with little earnings, who may be overqualified to participate in casual wage labour, but insufficiently skilled to join the organised, corporate sector.
Third, gendered imbalances in unpaid work continue to create extreme time poverty amongst India’s women, and result in career breaks.
Indian women spend about 5.5 hours on unpaid domestic work daily versus 40 minutes for men—an imbalance of over 8 times versus 3 times globally. This imbalance is even higher for married persons, as over 97% of married women participate in unpaid work versus just a third of married men. It’s no wonder then, that life events, such as marriage and children coincide with the “leaky pipeline” of women dropping out of the workforce, and then not returning.
Fourth, statutory maternity policies are disincentivising employers from hiring women.
Following an Amendment in the Maternity Benefits Act, 2017, women are entitled to six months of paid maternity leave. Consultations by Nikore Associates with over 100 women-led enterprises, academics, and experts show that employers are disincentivised from hiring women as they bear the full cost of maternity leave. Research confirms that post 2017, women in high fertility age groups are less likely to be employed and earn lower wages.
And finally, lack of institutional support from employers limits retention.
Nikore Associates’ analysis of over 500 diversity, equity, and inclusion initiatives of Nifty 50 companies shows that they are clustered into traditional, compliance measures—maternity benefits, prevention of sexual harassment, mentoring for senior leadership, and diversity hiring policies. A much smaller set of companies have innovative DEI measures like paternity or parental leave, creche facilities, or peer support networks—essential to improve retention.
Step Up To Bridge The Gap
Bridging these gender wealth inequalities requires concerted action to correct for labour market failures, on both the demand and supply side, that manifest in structural discrimination across a woman’s lifetime.
Governments can lead the way through policy reforms including mandating gender-neutral parental leave, setting up a parental leave fund to support small and medium enterprises, and introducing insurance products for parental leave.
Governments can also partner with community-based organisations to expand investments in the care economy. Public-private partnerships can include government support for establishing child and elderly care facilities operated by women-led self-help groups or CBOs, predominantly employing women. Governments can also support upgrades of Anganwadi centres, and formalisation of wages and working conditions for care workers—especially ASHAs, Anganwadi workers and auxiliary nurse midwives.
Private sector employers can develop data-driven DEI strategies focusing on the lifecycle of employees from recruitment to retention, to create a pipeline of women at different levels of seniority in the organisation.
Gender sensitisation to address unconscious bias, customised return to work programmes, and flexible work arrangements for care responsibilities for men, women and persons of minority genders are essential to create inclusive work environments.
Governments and the private sector can work together to expand access to tertiary education and create industry-responsive skill training modules targeted at women. Private sector corporate social responsibility funds can be leveraged to expand digital literacy trainings to bridge the gender digital divide.
Gender inequalities in earnings are a product of the opportunities and hurdles women face over their lifetime. The solutions to these persistent gaps must be rooted in structural changes which shift social norms governing women’s choices.
Mitali Nikore is an economist and gender policy specialist. She is the founder of the youth-led research group Nikore Associates.
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.