Contents
Introduction
India’s informal sector employs over 90% of its workforce (NSSO), yet women earn 30–40% less than men (ILO, 2023). Persistent gender norms, occupational segregation, and wage discrimination deepen labour market inequality.
Informal labour market: A gendered ecosystem
- Despite rising female workforce participation (PLFS 2024), most women remain concentrated in low-productivity and unpaid family work.
- Increase in rural women’s participation is driven by agriculture-based self-employment and unpaid labour, often misclassified as work.
- Women are predominantly engaged in disguised unemployment i.e. petty, residual and subsistence-level activities, reinforcing income precarity.
- Existence of glass floor effect, women trapped at the bottom of wage ladder due to structural constraints.
Socio-economic factors perpetuating gender wage disparity
| Socio-economic Factor | Effect on Women | Evidence / Report |
| Patriarchal norms & care burden | Restricts mobility and job choice | Women perform 312 minutes/day unpaid care vs. men’s 29 minutes (Time Use Survey 2019). |
| Lower human capital formation | Limited skills, lower bargaining power | Female enrolment in skill-based ITI training < 20% (MSDE). |
| Occupational segregation (horizontal segregation) | Women pushed into stereotypical sectors (domestic help, handicraft) | PLFS reveals women concentrated in 4–5 low-paying job categories. |
| Lack of financial & asset ownership | Limits access to credit and entrepreneurship | Only 13% women own land (Agricultural Census 2015–16). |
| Social norms on “primary breadwinner” | Women’s income treated as supplementary, lowering wage expectations | Reflected in backward-bending labour supply curve in upper deciles.. |
Discrimination limiting women’s access to wage employment
Despite low productivity in informal sector, gender discrimination persists in hiring, wages and job roles:
- PLFS unit-level analysis shows women earn less than men across all categories: Self-employment, casual wage work and regular wage employment.
- Employers prefer men due to assumptions around: maternity-related disruptions, “lower physical productivity” stereotype and lack of overtime flexibility.
- Wage employment is less accessible to women, pushing them to self-employment where earnings are often meagre and unpaid family work remains invisible.
- Absence of formal contracts, maternity benefits, and grievance redressal exacerbate exploitation.
Case Study: Beedi industry
- Women constitute 70% of workers (Labour Ministry), yet earn 30–50% lower wages than men performing similar tasks due to home-based piece-rate work.
Consequences of wage discrimination
- Lack of bargaining power in household decision making
- Perpetuation of feminisation of poverty
- Economic growth loss: reducing gender gaps can raise India’s GDP by 27% (McKinsey Global Institute).
Way Forward
| Reform | Mechanism |
| Strengthen Code on Wages, Code on Social Security | Mandate equal-pay audits, enforce gender-neutral minimum wage. |
| Invest in gender-responsive skilling (Digital, STEM) | Improves access to better-paying wage jobs. |
| Expand childcare infrastructure (crèches) | Reduces unpaid care burden, increases labour market hours. |
| Promote collective bargaining for informal women workers | Self-help groups & cooperatives improve wage negotiation. |
Conclusion
As Amartya Sen argues in Development as Freedom, empowerment needs choice and agency. Ensuring equitable wages in India’s informal sector is not just economic reform—it is social transformation.
