WOMEN AND WORK

The Problems

1. Not only do too few women work in India, but the proportion of women outside the labour force is increasing – and fast.

2. Even in high-skill professions like engineering and management, the proportion of women working is falling – although women are increasingly better educated.

3. Even those women that work are concentrated in ‘traditional’ professions, such as domestic work or teaching.

4. Existing skilling and employment generation programmes ignore the additional constraints on women workers – which means that they stay disadvantaged.

Building an Inclusive Labour Force

Rohini Pande

Key challenges and concerns

Higher labour market barriers for socially and economically disadvantaged population groups can increase the transmission of disadvantage across generations. This note summarizes the key challenges and concerns faced by one group – women – and discusses a few policy options.

Low rates of job creation, an increasing capital–labour ratio and lack of jobs for the highly skilled are leading to growing unemployment in India.¹ For the employed, wage growth has remained low.² The weight of both is felt more by women and other marginalized groups. India’s female labour force participation (FLFP) rate is low and has been falling precipitously. National Sample Surveys (NSS) show that between 1983 and 2011, Indian married women’s labour force participation (LFP) declined from 35 per cent to 24 per cent, even while the economy grew, educational attainment rose and fertility fell. By 2015, according to the Labour Bureau (LB), only 23 per cent of working age women were in the labour force.³

Worryingly, these declines are visible in high skill professions: the percentage of female employees among high-return professions (senior officers, legislators and managers) fell from 13 per cent in 2011 to 7 per cent in 2015 (Basole, et al.

Low FLFP in India is accompanied by:

· Marginalization among the unemployed; the vast majority of those outside the labour force but willing to work are women.

· Concentration of women in low-paying or socially acceptable industries – in essence, those that are a formal extension of domestic or childcare work.

· Higher share of household duties and childcare, irrespective of employment status.

An important driver of these trends is sex-based discrimination. Mondal, et al. (2018) show the gender wage gaps were primarily explained by discrimination (i.e., after accounting for different skill endowments between men and women) from 1993 to 2011 and increased in the same time period. Deshpande, Goel, and Khanna (2018) corroborate these findings and conclude that, given the improvement in education for women over the decade from 2000, if women’s endowments were valued equal to men’s then the wage gap would have reversed by now. So, how should policy respond to these trends?

Labour market reforms: Recommendations

Over the years, Indian state and Central governments have made multiple labour market reforms that target women. We recommend building on this body of reforms, while ensuring that any strengthening of existing reforms is undertaken in a manner that avoids unanticipated perverse effects. We discuss four different reform categories.

Strengthening existing policy: Affirmative action in employment could mimic the success of reservation policies for caste and women in politics, but better monitoring is required.

· Indian Central and state governments often use reservation policies in public administration and politics to increase representation. Reservation policies increased SC/ST representation in regular salaried employment by around five percentage points (Borooah, Dubey, and Iyer 2007). Fletcher, Moore, and Pande (2018) note the significant rise in female employment in education after Operation Blackboard effectively reserved teacher positions for women. Evidence from panchayats, where reservation for women has existed for a significant period, suggests that quotas can also reduce bias against women (Beaman, et al. 2009).

· Some states are experimenting with broad-based gender quotas for public sector employment (e.g., Rajasthan introduced a 30 per cent reservation for women in government jobs in 2010 including a 5 per cent reservation for widows) and other states have targeted quotas in specific sectors (e.g., police in Gujarat).

· More attention needs to be given to:

– Monitoring whether these quotas are filled, and necessary complementary policies to skill women in the required fields.

– In terms of skilling, a survey of vocational trainees in 2016 found that female quotas in training can act as ceilings to FLFP in some cases, indicating the policy may not reduce bias in the long term (Artiz Prillaman, et al. 2017). Here, it will be important to actively reduce explicit and implicit bias among trainers and recruiters.

Redesigning policy strategy: Increase social programmes that target individuals rather than households and ensure effective implementation

· The social causes of gender discrimination are insidious. The most challenging include the stigma against women working (particularly when married and/or with children) and migrating (except for marriage). A woman working outside the home drains household status in an extremely patriarchal society (Bernhardt, et al. 2018).

· Additionally, in patriarchal and patrilineal societies, household work is deemed the domain of women.

· Direct benefits transfers are an increasingly important part of India’s social sector infrastructure. Currently, political parties are stating interest in targeted minimum income programmes. It is important that they also discuss who in the household will receive the transfers. Research suggests value to transferring these resources to women’s accounts (Field, et al. 2019).

Changing policy approach: Mainstream gender in labour market policies

· Policies to increase FLFP are often considered separately from those of job creation and skilling. This can mean FLFP programmes fail to level the playing field. For example, skilling programmes in India are usually blind to the different safety and mobility concerns of men and women. Gender quotas in programmes like this are valuable, but likely to fail if the programme does not account for gender-based labour market barriers (Artiz Prillaman, et al. 2017).

· Skilling programmes should explicitly account for mobility barriers faced by women and their safety concerns. Migration support centres can play an important role.

Influencing the private sector: Subsidize the cost to employers of women-friendly policies

· There are important efficiency reasons for increasing female employment. However, it is likely that the social benefits exceed the private benefits.

· As such, firms may not have incentives to support policies that would benefit governments and society at large. A classic example is India’s recent maternity leave policy, where the cost is borne by private firms. Initial figures since the passage of the bill suggest that firms may be responding to higher costs by lowering female employment.⁴ Tax benefits, amnesty or similar schemes could align public and private sector incentives for hiring women.

· We propose immediate government funding for paid maternity leave with a focus on less-educated women and those in casual employment. The sentiment that women are ‘costly’ employees given employer-paid maternity leave is not unique to India: a 2014 survey of managers in the United Kingdom found that 40 per cent avoided hiring women as the costs of maternity leave were ‘too high’.⁵ For evidence in favour of government-funded maternity leave we refer to two cases and propose two specific reforms:

– First, we consider an experiment in California. In 2002, California passed the first comprehensive paid family leave (PFL) programme in the United States. The programme provides six weeks of partial wage replacement for workers who go on leave to bond with a new biological, adopted or foster child.⁶ The programme is funded by an employee-paid, inflation-indexed payroll tax, meaning there are no direct costs to employers. It is linked to California’s existing state disability insurance (SDI) system, such that the administrative burden does not fall on businesses.

– Second, we consider the Australian government’s parental pay leave (PPL). This is a government-funded scheme giving up to eighteen weeks of pay at the national minimum wage to full-time, part-time and casual working mothers.⁷ The payments are made to the employer first, who then pays them to the employee. New mothers can claim PPL or receive paid parental leave from their employer.

Within any policy or legislation on this issue, it is important to protect new mothers’ jobs with legislative guarantees that prevent employers from filling the positions of women on maternity leave.

Bibliography

Cinthya Anand, 2016, ‘Number of Unemployed Women Engineers in India Is as High as 40 Per Cent’, The Hindu, 26 August 2016.

E. Applebaum and R. Milkman, 2011, ‘Paid Family Leave Pays Off in California’, Harvard Business Review, https://hbr.org/2011/01/paid-family-leave-pays-off-in, accessed 15 October 2018.

——, 2011, ‘Leaves that Pay: Employer and Worker Experiences with Paid Family Leave in California’, http://cepr.net/documents/publications/paid-family-leave-1-2011.pdf, accessed 15 October 2018.

Soledad Artiz Prillaman, Rohini Pande, Vartika Singh, and Charity Troyer Moore, 2017, ‘What Constrains Young Indian Women’s Labor Force Participation? Evidence from a Survey of Vocational Trainees’, Evidence for Policy Design: Harvard University.

Amit Basole, et al., 2018, State of Working India 2018, Azim Premji University, Bengaluru.

Lori Beaman, Raghabendra Chattopadhyay, Esther Duflo, Rohini Panda, and Petia Topalova, 2009, ‘Powerful Women: Does Exposure Reduce Bias?’ Quarterly Journal of Economics, 124(4): 1497–540.

Marianne Bertrand and Sendhil Mullainathan, 2004, ‘Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labour Market Discrimination’, American Economic Review, 94(4): 991–1013.

Arielle Bernhardt, Erica Field, Rohini Pande, Natalia Rigol, Simone Schaner, and Charity Troyer Moore, 2018, ‘Male Social Status and Women’s Work’, American Economic Association: Papers & Proceedings, 108, pp. 363–67.

Vani K. Borooah, Amaresh Dubey, and Sriya Iyer, 2007, ‘The Effectiveness of Jobs Reservation: Caste, Religion and Economic Status in India’, Development and Change, 38(3): 423–45.

Ashwini Deshpande, Deepti Goel, and Shantanu Khanna, 2018, ‘Bad Karma or Discrimination? Male–Female Wage Gaps among Salaried Workers in India’, World Development, 102: 331–44.

Rachel Glennerster, Claire Walsh, and Lucia Diaz-Martin, 2018, ‘A Practical Guide to Measuring Women’s and Girls’ Empowerment in Impact Evaluations’, JPAL.

S. Goel, 2007, ‘Women in Engineering in India’, The International Journal of Interdisciplinary Social Sciences: Annual Review, 1(6): 1833–82.

Institute for Social Sciences Research, University of Queensland, 2014, PPL Evaluation: Final Report.

Seema Jayachandran, 2015, ‘The Roots of Gender Inequality in Developing Countries’, Annual Review of Economics, 7: 63–88.

S. Madheswaran and Smrutirekha Singhari, 2016, ‘Social Exclusion and Caste Discrimination in Public and Private Sectors in India: A Decomposition Analysis’, Indian Journal of Labour Economics, 59(2): 175–201.

Santosh Mehrotra, 2018, ‘The Indian Labour Market: A Fallacy, Two Looming Crises and a Tragedy’, SWI Background Paper 2018–9, Azim Premji University, Bengaluru.

Bidisha Mondal, Jayati Ghosh, Shiney Chakraborty, and Sona Mitra, 2018, ‘Women Workers in India: Labour Force Trends, Occupational Diversification and Wage Gaps’. SWI Background Paper 2018–3, Azim Premji University, Bengaluru.

NITI Aayog, 2017, ‘Report of the Task Force on Improving Employment Data’, National Institution for Transforming India, New Delhi, http//niti.gov.in/content/report-taskforce-improving-employment-data#.

Uma Rani and Jeemol Unni, 2009, ‘Do Economic Reforms Influence Home-Based Work? Evidence from India’, Feminist Economics, 15(3): 191–225.

TeamLease, 2018, ‘Maternity Report’, http://www.teamleasegroup.com/maternity-report, accessed on 7 October 2018.

Sukhadeo Thorat and Paul Attewell, 2007, ‘The Legacy of Social Exclusion: A Correspondence Study of Job Discrimination in India’, Economic and Political Weekly, 42(41): 4141–45.

Data sources (Basole, et al. 2018)

Quinquennial Employment-Unemployment Surveys of the NSSO (NSS-EUS): 1993–94 to 2011–12.

Annual Employment-Unemployment Surveys of the Labour Bureau (LB-EUS): 2nd Round (2011–12) and 5th Round (2015–16).

Centre for Monitoring Indian Economy (CMIE): The CMIE, in collaboration with the Bombay Stock Exchange, has been publishing reports called ‘Unemployment in India: A Statistical Profile’ since 2016. Three reports are published per year.

International Labour Organization statistical database (ILO-STAT).

The Solutions

1. Quotas for women might help, and there is clear evidence that they have reduced bias; but they need to be carefully monitored to make sure they are effective.

2. Because of ingrained patriarchy, the government may have to start intervening in how households operate – for example, by ensuring that income transfers under various schemes go to the woman’s bank account.

3. Gender sensitivity and women workers’ specific needs should be built into the design of all employment and skilling schemes. For example, safe transport to and from the workplace needs to be a priority.

4. The social benefits from more women working are high enough that this may be a fit case for subsidies to change the incentives of the private sector. For example, total or partial state funding for maternity leave has been shown to be helpful.

¹Between 2011 and 2016 the Indian workforce (those in work or actively seeking employment) grew at a low rate of approximately 2.5 per cent per annum – reaching 934 million (Basole, et al. 2018). Household surveys such as the National Sample Survey and Labour Bureau’s survey are used to calculate the unemployment and labour force participation rates. See data sources in bibliography.

²The majority of households have an income below the Seventh Central Pay Commission level, leading to excessive demand for government jobs: 82 per cent of male and 92 per cent of female workers earn less than Rs 10,000 a month (minimum salary recommended by the Seventh Central Pay Commission is Rs 18,000 (Basole, et al. 2018).

³More recent estimates are highly variable. The Centre for Monitoring Indian Economy enumerated FLFP in 2017 at 12 per cent. The ILO estimate was 27 per cent in the same year. Even at the latter, more optimistic figure, India ranked 121 out of 131 countries for FLFP.

⁴TeamLease (2018) Maternity Report suggests between 1.1 million and 1.8 million fewer women across 10 sectors will achieve employment in 2018–19 because of the Maternity Leave Act. Extrapolating to all sectors raises the figure to around 12 million.

⁵See https://www.theguardian.com/money/2014/aug/12/managers-avoid-hiring-younger-women-maternity-leave

⁶For birth mothers, this is available in addition to medical leave offered to recover from pregnancy and childbirth.

⁷For more details, see: https://www.fairwork.gov.au/leave/maternity-and-parental-leave/paid-parental-leave

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