Gender Discrimination in Wage Earnings: A Study of Indian Wage Market

Abstract

The fact that globally a gender gap exists along axes of economic, social and political outcomes is well documented. Studies have shown such gaps to be increasing or decreasing, changing by varying degrees, varying by magnitude depending on the period of study and region of analysis. The World Economic Forum’s Global Gender Gap Report shows tardy progress on closing the gender gaps along multiple axes. The report states that even while the global gender gap has become smaller since 2006, the extent of its closure is a measly four per cent; if this trend were allowed to perpetuate, it would take over a 100 years for the world’s women to be on par with men. India has tightened its gender gap by 2% in a year, which now stands at 68% across the four pillars of economy, education, health and political representation. The major improvement, however, has been witnessed in the arena of education, where the gaps in primary and secondary education have been completely eliminated. In the economic sphere, much work remains to be done. In so far as ensuring gender equality continues to be one of the objectives of Sustainable Development Goals, lack of it constitutes a challenge. Such gap is, however, either on account of inputs or characteristics that are different across members of different genders (the explained gap) or on account of differential premium on possession of comparable characteristics across genders (the unexplained gap). Decomposition of such gaps into their explained and unexplained fractions is important for the purpose of measuring the precise extent of gender discrimination. This paper fills a void in the existing literature by analysing such gaps in the wage market across select states of India. The paper uses the technique of Blinder–Oaxaca decomposition for the purpose of study, which has not been applied so far in studying inter-state characterization of gender wage gaps. Thereafter, the paper compares the results obtained for pooled wage market of India with results for urban and rural wage markets.