Paper short abstract:

The paper argues that the acute occupational segregation in the form of intense feminization of certain jobs (allocative discrimination) is a critical reason of high gendered wage gap. It aims to problematize the concept of (frustrated) freedom and argues that the precarious labour market outcomes are continuously reshaping the capabilities, aspiration and agency of educated females in India.

Paper long abstract:

Research Context:

Sen (1999, 2014) in his Capability Approach argued that paid employment is a critical functioning for emancipation of women as it enhances individual’s capabilities. However, this functioning mirrors to a large extent the gender inequality in domestic work and nonmarket care activities (Robeyns, 2003). In India, gender inequality is one of the most pervasive and enduring forms of inequalities – and the labour market is not an exception. Inequalities and discrimination stemming from patriarchal social norms are evident in the form of low labour force participation, insecure employment, and discriminatory wages.

Wage discrimination has been defined as the gap that remains in earnings across groups after accounting for all observable characteristics (Blau and Kahn, 2000). Wage gaps, not favouring females, are an issue that both developed and developing countries are grappling with, nonetheless with varied intensity. The fact that women earn less than men gave rise to discussions in the industrialised countries in the 1970s. Since then, the gender pay gap has been extensively studied (theoretically and empirically) in the literature of labour economics and sociology.

A recent report by World Economic Forum on Gender wage gap highlights that, globally females earn 77% of wages of their male counterparts; for India it is even lower at 73%. Further, India is observing a secular fall in the female labour force participation rate (FLPR) in recent years, despite robust economic growth, fall in fertility rates, and improvement in females’ educational levels. National Sample Survey (NSS) data of India highlights that higher education doesn’t successfully translate into better labour market outcomes in terms of FLPR. In 2018-19, the FLPR for graduates was only 29.2%. These precarious trends have received much attention, some arguing that the plunge in FLPR is due to rise in females’ educational aspiration. However, the recent NSS data (2020-21) reports that in India 51.7% young women (15-29 years) are neither in education and training nor in any kind of employment; among males, this figure is much lower at 15.4%. The low female labor force participation is coupled with gaping wage discrimination in the labor market the extent of which has shown an upward trend. Literature has highlighted that societal gendered norm along with of occupational segregation play pivotal roles towards wage gaps, favouring males. One can predict that these outcomes have severe adverse impact on shaping women agency, aspiration and freedom.

With very few Indian studies capturing the gamut of these issues which showcases a telling situation has shaped the rationale for the present study.

It has two parts – the first part attempts to unpack the reasons behind falling FLPR and measure the Wage gaps (through wage decomposition for entire distribution and at the average) across gender (male/female) to estimate the exact nature and extent of discrimination. It further attempts to understand whether higher education qualification mitigates the wage gap or ensure equitable employment outcomes? Do women face “glass ceiling” or “sticky floor” in India? What is the extent of allocative discrimination or occupational segregation?

The second part of this study aims to problematize the concept of (frustrated) freedom (Sen 1999, Victor et.al. 2013) in context of labour market discrimination against women. It attempts to understand how the gendered norms within the family and adverse labour market outcomes impact women’s freedom by creating a situation of frustrated freedom for them.

Methodology

This part of the study relies on the methods of quantile wage decomposition (Machado and Mata 2005) and average wage decomposition (Blinder Oaxaca 1973) to ascertain the extent of unexplained component (discrimination) in wage gaps between males and females.

The overall and local Occupational Segregation is measured by using the method proposed by Alonso-Villar and Del Rio (2010).

Analysis and conclusion

The results suggest, even with similar endowment, graduate females are paid much less (21% to 34%) than their male counterparts. The extent of this discrimination has grown over time- from 70 percent in 2011-12 to 85 percent in 2017-18 which has been arrived at using two cross sectional national level unit data (National Sample Survey 2011 and Periodic Labour Force Survey 2017). This has happened despite several policies and rhetoric of women empowerment. Using Mutual Information index and Multi group index of dissimilarity for occupational segregation, the paper further argues that the acute occupational segregation in the form of intense feminization of certain jobs (allocative discrimination) is a critical reason of high wage gap. Also, while the females in white collar jobs face ‘glass ceiling’, at the low-end precarious jobs most females encounter ‘sticky floor’ effect in India.

Following Nussbaum (1999) the study ascertains that freedom and preferences are not exogenous, rather often they are constructed by structural conditions like social tradition of privilege and subordination. The study thus argues that the precarious labour market outcomes are continuously shaping and reshaping the capabilities, aspiration and agency of higher educated females in India, thereby affecting their future life choices and wellbeing.

Key words: Higher Education, Labour market discrimination, Capability, Frustrated Freedom, Indian females