Advertisement

Gender income gap in rural informal micro-enterprises: an unconditional quantile decomposition approach in the handloom industry

  • Bhabesh HazarikaEmail author
Regular Article

Abstract

Based on primary data, the present study analyzes the gender income gap and its compositions throughout the income distribution of the handloom micro-entrepreneurs in Assam. The unconditional quantile decomposition reveals the existence of substantial gender income gaps along the income distribution. The differences in the productive characteristics explain much of the gap at the median and beyond. The endowment effects of education, financial literacy, risk attitude, SHGs membership, and technology adoption are found in favor of the male micro-entrepreneurs. The results suggest that the extent of risk aversion towards producing high-valued dress materials and poor management of entrepreneurial activities of the females have widened gender gap, particularly at the upper quantiles of the income distribution.

Keywords

Micro-entrepreneurs Handloom Gender Income gap Unconditional quantile regression 

JEL Classification

L26 L67 D13 D33 D63 

Notes

References

  1. Ahmed, S., & Maitra, P. (2015). A distributional analysis of the gender wage gap in Bangladesh. The Journal of Development Studies, 51(11), 1444–1458.CrossRefGoogle Scholar
  2. Ahmed, S., & McGillivray, M. (2015). Human capital, discrimination, and the gender wage gap in Bangladesh. World Development, 67, 506–524.CrossRefGoogle Scholar
  3. Álvarez G, Gradín C, Otero MS (2009). Self-employment in Spain: transition and earnings differential. Universidade de Vigo, Departamento Economía Aplicada Documento de Traballo 0907, Vigo.Google Scholar
  4. Arellano, M., & Bonhomme, S. (2017). Sample selection in quantile regression: a survey. In Koenker et al. (Eds.), Handbook of quantile regression (pp. 209–224). New York: Taylor and Francis Group.Google Scholar
  5. Åstebro, T., & Chen, J. (2014). The entrepreneurial earnings puzzle: mismeasurement or real? Journal Business Venturing, 29, 88–105.CrossRefGoogle Scholar
  6. Becolod, M. (2016). Skills, the gender wage gap, and cities. Journal of Regional Science, 57, 290–318.CrossRefGoogle Scholar
  7. Bhagavatula, S., Elfring, T., Tilburg, A. V., & Bunt, G. G. V. (2010). How social and human capital influence opportunity recognition and resource mobilization in India’s handloom industry. Journal Business Venturing, 25, 245–260.CrossRefGoogle Scholar
  8. Blinder, A. S. (1973). Wage discrimination: reduced form and structural estimates. Journal of Human Resource, 8, 436–455.CrossRefGoogle Scholar
  9. Bortamuly, A. B., & Goswami, K. (2012). Factors influencing wage structure of the handloom workers in Assam: An assessment from gender perspective. Journal of Rural Development, 31(139–150), 2012.Google Scholar
  10. Bortamuly, A. B., Goswami, K., & Hazarika, B. (2013). Determinants of occupational choice of workers in handloom industry in Assam. International Journal Social Economics, 40, 1041–1057.CrossRefGoogle Scholar
  11. Bortamuly, A. B., Goswami, K., Hazarika, B., & Handique, K. (2014). Do different determinants affect differently across gender and location in handloom entrepreneurship development? Journal of Small Business & Entrepreneurship, 27, 427–449.CrossRefGoogle Scholar
  12. Buchinsky, M. (2001). Quantile regression with sample selection: estimating women’s return to education in the US. Empirical Economics, 26, 87–113.CrossRefGoogle Scholar
  13. Carter, S. (2011). The rewards of entrepreneurship: exploring the incomes, wealth, and economic well-being of entrepreneurial households. Entrepreneurship Theory and Practice, 35(39–55), 2011.Google Scholar
  14. Chi, W., & Li, B. (2014). Trends in China’s gender employment and pay gap: estimating gender pay gaps with employment selection. Journal of Comparative Economics, 42, 708–725.CrossRefGoogle Scholar
  15. Chzhen, Y., & Mumford, K. (2011). Gender gaps across the earnings distribution for full-time employees in Britain: Allowing for sample selection. Labour Economics, 18, 837–844.CrossRefGoogle Scholar
  16. Cressy, R. (2006). Why do most firms die young? Small Business Economics, 26(2), 103–116.CrossRefGoogle Scholar
  17. Das, P. (2012). Wage inequality in India: Decomposition by sector, gender and activity status. Economic and Political Weekly, 47(50), 58–64.Google Scholar
  18. Deininger, K., Jin, S., & Nagarajan, H. (2013). Wage Discrimination in India’s informal labor markets: Exploring the impact of caste and gender. Review of Development Economics, 17(1), 130–147.CrossRefGoogle Scholar
  19. Deshpande, A. (2013). Entrepreneurship or survival? Caste and gender of small business in India. Economic and Political Weekly, 118(80), 38–49.Google Scholar
  20. Deshpande, A., & Sharma, S. (2016). Disadvantage and discrimination in self-employment: caste gaps in earnings in Indian small businesses. Small Business Economics, 46, 325–346.CrossRefGoogle Scholar
  21. Directorate of Economics and Statistics. (2011). Statistical Handbook of Assam 2010. Guwahati: Government of Assam.Google Scholar
  22. Fairlie, R. W., & Robb, A. M. (2009). Gender differences in business performance: evidence from the characteristics of business owners survey. Small Business Economics, 33, 375–395.CrossRefGoogle Scholar
  23. Firpo, S., Fortin, N., & Lemieux, T. (2009). Unconditional quantile regressions. Econometrica, 77, 953–973.CrossRefGoogle Scholar
  24. Fortin, N. (2008). The gender wage gap among young adults in the United States: The importance of money versus people. Journal of Human Resources, 43, 886–929.CrossRefGoogle Scholar
  25. Fortin, N., Lemieux, T., & Firpo, S. (2011). Decomposition methods in economics. In O. Ashenfelter & D. Card (Eds.), Handbook of labor economics (4A) (pp. 1–102). Amsterdam: Elsevier.Google Scholar
  26. Gardeazabal, J., & Ugidos, A. (2004). More on identification in detailed wage decompositions. Review of Economics and Statistics, 86, 1034–1036.CrossRefGoogle Scholar
  27. Gardner, D. G., Cummings, L. L., Dunham, R. B., & Pierce, J. L. (1998). Single-item versus multiple-item measurement scales: An empirical comparison. Educational and Psychological Measurement, 58(6), 898–915.Google Scholar
  28. Goswami, K., Hazarika, B., & Handique, K. (2019). Entrepreneurial motivations of socio-cultural relevance: an exploratory analysis in the handloom industry in Assam. Asian Journal of Women’s Studies, 25(3), 317–351.CrossRefGoogle Scholar
  29. Hazarika, B., Bezbaruah, M. P., & Goswami, K. (2016). Adoption of modern weaving technology in the handloom micro-enterprises in Assam: A double hurdle approach. Technological Forecasting and Social Change, 102, 344–356.CrossRefGoogle Scholar
  30. Hazarika, B., & Goswami, K. (2014). Rural non-farm micro-entrepreneurship or not: gender issue in decision making. Paper presented at the 6th Bolivian Conference on Development Economics, Cochabamba.Google Scholar
  31. Hazarika, B., & Goswami, K. (2016). Do home-based micro-entrepreneurial earnings empower rural women? Evidence from the handloom sector in Assam. Asian Journal of Women’s Studies, 22, 289–317.CrossRefGoogle Scholar
  32. Heckman, J. (1979). sample selection bias as a specification error. Econometrica, 47, 153–163.CrossRefGoogle Scholar
  33. Honig, B. (1998). What determines success? Examining the human, financial, and social capital of Jamaican microentrepreneurs. Journal of Business Venturing, 13, 371–394.CrossRefGoogle Scholar
  34. Hundley, G. (2001). Why women earn less than men in self-employment. Journal of Labor Research, 22, 817–829.CrossRefGoogle Scholar
  35. Iyer, L., Khanna, T., & Varshney, A. (2013). Caste and entrepreneurship in India. Economic and Political Weekly, 48, 52–60.Google Scholar
  36. Jann, B. (2008). A Stata implementation of the Blinder–Oaxaca decomposition. Stata Journal, 8, 453–479.CrossRefGoogle Scholar
  37. Jimenez, G., Ongena, S., Peydro, J. L., & Saurina, J. (2014). Hazardous times for monetary policy: What do 23 million bank loans say about the effects of monetary policy on credit risk-taking? Econometrica, 82(2), 463–505.CrossRefGoogle Scholar
  38. Jodhka, S. S. (2010). Dalits in business: Self-employed scheduled castes in Northwest India. Economic and Political Weekly, 55, 41–48.Google Scholar
  39. Khanna, S. (2012). Gender wage discrimination in India: Glass ceiling or sticky floor? Working Paper No. 214. Centre for Development Economics, Delhi School of Economics, New Delhi.Google Scholar
  40. Kijima, Y. (2006). Why did wage inequality increase? Evidence from Urban India 1983–1999. Journal of Development Economics, 81, 97–117.CrossRefGoogle Scholar
  41. Koellinger, P., Minniti, M., & Schade, C. (2013). Gender differences in entrepreneurial propensity. Oxford Bulletin of Economics and Statistics, 75, 213–234.CrossRefGoogle Scholar
  42. Koenker, R., & Bassett, G. (1978). Regression quantiles. Econometrica, 46, 33–50.CrossRefGoogle Scholar
  43. Koenker, R., & Hallock, K. (2001). Quantile regression: An introduction. Journal of Economic Perspectives, 15(43–56), 2001.Google Scholar
  44. Langowitz, N., & Minniti, M. (2007). The entrepreneurial propensity of women. Entrepreneurship Theory and Practice, 31(3), 341–364.CrossRefGoogle Scholar
  45. Lechmann, D. S. J., & Schnabel, C. (2012). Why is there a gender earnings gap in self-employment? A decomposition analysis with German data. IZA Journal of European Labor Studies, 1, 1–25.CrossRefGoogle Scholar
  46. Leung, D. (2006). The male/female earnings gap and female self-employment. Journal of Socio Economics, 35, 759–779.CrossRefGoogle Scholar
  47. Loscocco, K., & Bird, S. R. (2012). Gendered paths: Why women lag behind men in small business success. Work and occupations, 39(2), 183–219.CrossRefGoogle Scholar
  48. Machada, J. A. F., & Mata, J. (2005). Counterfactual decomposition of changes in wage distributions using quantile regression. Journal of Applied Economics, 20, 445–465.CrossRefGoogle Scholar
  49. Magnani, E., & Zhu, R. (2012). Gender wage differentials among rural–urban migrants in China. Regional Science and Urban Economics, 42, 779–793.CrossRefGoogle Scholar
  50. Matano, A., & Naticchioni, P. (2016). What drives the urban wage premium? Evidence along the wage distribution. Journal of Regional Science, 56, 191–209.CrossRefGoogle Scholar
  51. Melly, B. (2005). Decomposition of differences in distribution using quantile regression. Labour Economics, 12, 577–590.CrossRefGoogle Scholar
  52. Mincer, J. (1958). Investment in human capital and personal income distribution. Journal of Political Economy, 66, 281–302.CrossRefGoogle Scholar
  53. Ministry of Textile. (2018). Annual report 2017–18. New Delhi: Ministry of Textile, Government of India.Google Scholar
  54. MoMSMEs. (2017). Annual report 2016–17. New Delhi: Ministry of Micro, Small and Medium Enterprises, Government of India.Google Scholar
  55. Mulligan, C., & Rubinstein, Y. (2008). Selection, investment, and women’s relative wages over time. Quarterly Journal of Economics, 123(3), 1061–1110.CrossRefGoogle Scholar
  56. NCAER. (2004). Joint census of handloom & powerloom 1995–1996: handloom sector. New Delhi: National Council of Applied Economic Research.Google Scholar
  57. NCAER. (2010). Handloom census 2009–2010. New Delhi: Development Commissioner for Handlooms, Government of India.Google Scholar
  58. Nordman, C. J., Robilliard, A., & Roubaud, F. (2011). Gender and ethnic earnings gaps in seven West African cities. Labour Economics, 18, S132–S145.CrossRefGoogle Scholar
  59. Oaxaca, R. (1973). Male–female wage differentials in urban labor markets. International Economic Review, 14, 693–709.CrossRefGoogle Scholar
  60. Orser, B. J., Riding, A. L., & Manley, K. (2006). Women entrepreneurs and financial capital. Entrepreneurship Theory and Practice, 30, 643–665.CrossRefGoogle Scholar
  61. Shariff, A., & Azam, M. (2011). Income inequality in rural India: Decomposing the Gini by income sources. Economics Bulletin, 31, 739–748.Google Scholar
  62. Simon, J. K., & Way, M. M. (2016). Why the gap? Determinants of self-employment earnings differentials for male and female millennials in the US. Journal of Family and Economic Issues, 37(2), 297–312.CrossRefGoogle Scholar
  63. Verrest, H. (2013). Rethinking microentrepreneurship and business development programs: Vulnerability and ambition in low-income urban Caribbean households. World Development, 47, 58–70.CrossRefGoogle Scholar
  64. Yun, M. (2006). Earnings inequality in USA, 1969–1999: Comparing inequality using earnings equations. Review of Income and Wealth, 52(1), 127–144.CrossRefGoogle Scholar

Copyright information

© Eurasia Business and Economics Society 2019

Authors and Affiliations

  1. 1.National Institute of Public Finance and Policy (NIPFP), Autonomous Institute of Ministry of Finance, Govt. of IndiaNew DelhiIndia

Personalised recommendations