Indian Economic Review

, Volume 54, Issue 2, pp 239–260 | Cite as

Gender-based wage inequality and economic liberalism in the presence of endogenous supply of female labour

  • Sarbajit Chaudhuri
  • Somasree Poddar RoychowdhuryEmail author
  • Salonkara Chaudhuri


This paper develops a three-sector general equilibrium model for a small open developing economy with a non-traded sector that uses only unskilled female labour to provide final services to the skilled families. For measuring the gender-based inequality, we concentrate solely on the unskilled labour market knowing fully well that there exists gender wage discrimination in the market for skilled labour as well. The unskilled female labour supply is endogenously determined from the optimizing behavior of a representative unskilled working family. The consequences of FDI flows and credit market reform have been analyzed on the gender-based wage inequality. Besides, we have gone in for examining the policy impacts on skill-based wage inequality assuming away discrimination against female labour in the high-skilled labour market. Finally, the consequences of FDI flows and credit market reform on the welfare of a poor unskilled working family have also been studied.


Male labour Female labour Gender-based wage inequality Skilled-unskilled wage inequality Endogenous female labour supply Economic reform General equilibrium 

JEL classification

D50 J16 J20 F21 


Compliance with ethical standards

Conflict of interest

On behalf of all authors, the corresponding author states that there is no conflict of interest.


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Copyright information

© Editorial Office, Indian Economic Review 2019

Authors and Affiliations

  • Sarbajit Chaudhuri
    • 1
  • Somasree Poddar Roychowdhury
    • 2
    Email author
  • Salonkara Chaudhuri
    • 3
  1. 1.Department of EconomicsUniversity of CalcuttaKolkataIndia
  2. 2.Department of EconomicsLady Brabourne CollegeKolkataIndia
  3. 3.Department of Economics, Faculty of ScienceUniversity of QueenslandBrisbaneAustralia

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