The gender pay gap or gender wage gap is the average difference between the remuneration for men and women who are working. Women are generally found to be paid less than men.
The gender wage gap is often expressed as a percentage of what men earn compared to what women earn. Factors such as discrimination, differences in education and experience, occupational segregation, and work-life balance issues are the major reason for gender wage gap. This is a significant barrier to achieving gender equality in the workplace and in society.
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Statistics
- As per national figures, the average rural wage for men is Rs 393/day whereas a woman worker’s wage is Rs 265/day. Similarly, the urban wage for men is Rs 483/day against Rs 333/day for women.
- According to a report by the World Economic Forum, India ranks a low 108th out of 153 countries in terms of the gender pay gap. This disparity is not only unfair, but it also has a significant impact on the economic stability and growth of the country.
- According to a report by the International Labour Organization (ILO), the gender pay gap in India stands at 27% as of 2023. This means that, on average, women in India earn 73% of what men earn for doing the same job. This gap is even wider in certain industries, such as the technology sector, where women earn just 60% of what men earn.
- “Women and Men in India 2022” by the National Statistical Office. The report states that the market-determined wages for women performing similar work are considerably lower than those of men. Moreover, the gender wage gap has widened in rural areas over the past decade, although it has narrowed in towns.
A study by the National Association of Software and Services Companies (NASSCOM) found that women in technology roles earn 29% less than men, with the gap being even wider at the senior management level.
Reasons for Gender Wage Gap in India
First, women are often concentrated in low-paying jobs and so-called “women jobs such as domestic work, nurses, agriculture, and textiles, while men dominate high-paying sectors like engineering, finance, and technology.
Second, women in India have lower levels of education and fewer opportunities to develop skills compared to men, which limits their job prospects and earnings potential.
Third, in India women face discrimination in the workplace, including lower pay for the same job, fewer opportunities for promotion, and less access to training and development programs.
Fourth, many women in India work in the informal sector, which lacks legal protections, benefits, and job security, and often pays lower wages.
Fifth, women labourers are assumed to have low skill levels on entry, a lack of access to on-the-job training and responsibilities of family which leads to them gaining lesser opportunities of employment and being paid less on the job.
Sixth, traditional gender roles and societal expectations often limit women’s participation in the workforce and reinforce gender stereotypes that perpetuate the wage gap. Men forbidding women to work as their economic status grows is also a major reason for restricting women to work outside their homes.
Last, women tend to have less professional experience than men due to unpaid obligations such as childcare, which leads to a career gap. According to a report by McKinsey, just 14% of senior-level positions in India are held by women. This lack of representation at the top levels of organizations leads to a lack of role models for women and a lack of policies and practices that support gender equality.
As per World Bank estimates, the female labor participation rate in India fell to 20.3% before the pandemic – from more than 26% in 2005 and 31.9% in 1983. This decline in female LFPR can be attributed to various factors like obligations towards the performance of domestic duties, conservative social norms, and the lack of flexible work models. It is also observed that household constraints trump financial needs and individual preferences for job choice among women.
This bleak scenario of women’s workforce participation having slid towards regression could, however, take a positive turn. The COVID-19 and post-pandemic hybrid work models could become game-changers for many women as they offered flexible and more innovative work options with increasingly empathetic work cultures.
Initiatives taken by Government
- The Constitution of India guarantees equal pay for equal work for both men and women under Article 39(d) and Article 42. It also prohibits discrimination on the basis of gender under Article 15(1) and Article 15(2).
- India enacted the Minimum Wages Act in 1948 and followed by the adoption of the Equal Remuneration Act in 1976. In 2019, India carried out comprehensive reforms in both the legislation and enacted the Code on Wages.
- The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005 benefited rural women workers and helped reduce the gender pay gap, both directly and indirectly. Directly, by raising the pay levels of women workers who participated in the programme, and indirectly, benefits accrued to women involved in agricultural occupations through higher earnings.
- To boost the participation of women in the entrepreneurship ecosystem, the government has introduced a plethora of schemes, such as the Mudra Yojana, Udyogini Scheme, Annapurna Scheme and Stand Up India.
SHGs provide women entrepreneurs with micro-loans to sustain their businesses, while also creating an environment for them to develop greater agency and decision-making skills. - In 2017, the Government amended the Maternity Benefit Act of 1961, which increased the ‘maternity leave with pay protection’ from 12 weeks to 26 weeks for all women working in establishments employing 10 or more workers.
With this, India has also improved in hiring more women for several work sectors. India has worked on its presentation in all the five sub-records of the health and education sectors. Female enrolment in education expanded from 92%in 2012 to 93.57% in 2022, as per WEF information. Their support for tertiary schooling, even though lower than male cooperation, went up from 15% in 2012 to 27.8% in 2022. A huge number of the ladies were educated in 2012; presently, that proportion is climbing towards 66%.
Way Forward
Enforce equal pay laws: In India, there is already a provision for equal pay for equal work. But government and other stakeholders must ensure that this provision is applicable in all industries or workplace.
Promote gender diversity: Employers should work to promote gender diversity at all levels of their organization and provide equal opportunities for all employees. It is possible only through the appointment of more female workers at the workplace.
Address occupational segregation: Employers and government should work together to reduce occupational segregation by recruiting and retaining more women in male-dominated fields and encouraging women to pursue careers in science, technology, engineering, and math (STEM).
Invest in education and training: Investing in education and training can help women acquire the skills and knowledge needed to succeed in higher-paying jobs. It can be done through awareness campaigns among parents to educate girl child.
Encourage women’s entrepreneurship: Encouraging women’s entrepreneurship can create more job opportunities and increase the earning potential of women.
Provide support for work-life balance: Employers should provide flexible work arrangements, such as work from home or hybrid system of working, telecommuting and paid parental leave, to support employees in balancing work and family responsibilities.
Address cultural and social norms: Addressing cultural and social norms that perpetuate gender stereotypes can help to create a more equal society. Social development is another factor in reducing gender wage gap.
