Liberalization’s impact on gender discrimination: 

Liberalization’s impact on gender discrimination: 

Context

Economic reforms have not reduced gender discrimination.

What is the issue?

• Conventional wisdom suggests that gender discrimination should have declined in India because of the economic liberalization in early 1990s.

• Increased market competition forces firms to eliminate inefficient discriminatory practices, including gender discrimination.
• The room for hiring their own “types” is less when firms face intense competition.
• Market competition works in favour of women, as women are more competitive, and offer cheaper and more flexible labour.
• Evidence suggests that India’s economic liberalization has not reduced gender discrimination. It may have worsened in many respects.

Analysis of Sector-wise employment of women

• The share of females in manufacturing employment has not increased much over last two decades.
• Female activity is largely concentrated in the unorganized sector. The concentration of female entrepreneurs in low-wage industries has grown over time.
• Despite many competitive reforms that India has undertaken, this pattern of gender-based segmentation has been increasing over the years.
• Women entrepreneurs are more dominant in industries that pay lower average wages.
• Within the manufacturing sector, female ownership shares are highest and typically exceed 50% in industries related to chemicals and chemical products, tobacco products, and paper and paper products.
• Among service industries, female ownership shares exceed 30% in industries related to sanitation and education.
• Inadequate infrastructure also affects women more than men, because women are often responsible for a larger share of, and often more time-consuming, household activities.

What drives the gender balance of new enterprises?

• Empirical results suggest that an industry with more incumbent female employment has a greater female entry share.
• Among district-level traits, a higher female-to-male ratio, an age profile emphasizing working age population, and better quality infrastructure appear important.
• Access to major cities does not influence the gender balance of entrepreneurship, but infrastructure access within a district does.
• Better electricity and water access may reduce the burden of women in providing essential household inputs for their families, and allow for more time to be directed toward entrepreneurial activities.

What can India do to reduce gender discrimination?

• India’s 73rd Constitutional Amendment Act, passed in 1992, instituted one-third seat reservations for women in local governance bodies.
• The political empowerment of women had huge beneficial effects.
• The political reservation for women has gained India global recognition.
• However, India’s economic liberalization and increased market competition has not eliminated gender segmentation.
• India’s gender balance in entrepreneurship and jobs remains among the lowest in the world.
• Globalization and trade policy have made a limited contribution towards India’s convergence in gender segmentation.
• However, improved physical and human infrastructure, and domestic pro-competitive reforms have reduced gender segmentation.
• Gender will play a bigger and more strategic role in India’s future growth.
• This growth will come in many forms: increased female labour force participation, improvements in productivity, elimination of gender discrimination in access to bank loans, and increased voice and political representation.
• Finally, empowering half of the potential workforce has significant economic benefits beyond promoting gender equality.