Gender Wage Inequality and Economic Recession

The Paper develops a two sector full employment general-equilibrium model for a small open developing economy, with both male and female labor. One sector produces low-skilled export commodity while other sector produces high skilled import competing commodity. The effects of world-wide economic recession on gender wage inequality have been examined in such an economy. The analysis concludes that low demand for high skilled commodity and/or low volume of foreign direct investment due to recession may aggravate the average gender wage inequality in the economy.

     

Gender Wage Gap: Some Recent Evidences from India

Gender wage inequality is a chronic socioeconomic malice in developed as well as in developing countries. This paper describes the outcomes of our study on the estimation of gender wage gap in the Indian labour market, using the 68th Round NSSO employment–unemployment data. The study uses Blinder–Oaxaca decomposition technique and Heckman two-step methodology, for removal of selectivity bias in the sample data, to measure the components of total gender wage gap, viz. (1) occupational segregation (explained by economic rationale) and (2) direct discrimination (not explained by economic rationale). The analysis indicates that the maximum direct discrimination is for job-related factors, such as industry type which are controlled by employers. The majority of the Indian employers today are men, which may be the reason for the insensitivity to the chronic direct discrimination against women in workplaces. The study also indicates that most of the explained gender wage gap is due to lower skill and experience amongst women. The findings suggest that besides labour law reforms for ensuring gender neutrality in workplaces, focused government policies for promoting women entrepreneurship and skill development of women are urgently required for reducing the gender wage gap in India.

     

Economic Reforms and Gender-Based Wage Inequality in the Presence of Factor Market Distortions

A simple three-sector general equilibrium model has been developed with both male and female labour and factor market distortions. The effects of different liberalized economic policies have been examined on the gender-based wage inequality. The analysis finds that credit market reform and tariff reform produce favourable effects on the wage inequality while the liberalized investment policy becomes counterproductive. The basic model has been extended to treat domestic capital differently from foreign capital. In the extended model, all of the above results hold. Additionally, it has been found that domestic capital formation is likely to produce a favourable impact on the gender wage inequality. These results have important policy implications for a small open developing economy.