Gender Pay Gap in India: Evidence from Urban Labour Market

This paper examines the extent of gender wage gap and its determinants in urban labour market in India. The study finds that women's work is undervalued even in regular salaried jobs in India's urban labour market and female workers are getting substantially lower wages than their male counterpart in almost all sectors and occupations sub-categories despite controlling for differences in experience, education, geographical differences and other individual characteristics. When we disentangled the gender pay gap, we found that around two-thirds of the pay gap is attributed to pure labour market discrimination and only one-third is attributed to endowment difference. The extent of pay gap is higher at lower end of wage distribution which is primarily dominated by women from lower caste, Muslims and less skilled workers. The pay gap steadily declines towards higher end of wage distribution. This clearly indicates that there exists 'sticky floor' in India's urban labour market. Such persistent and high level of gender pay gap may pose a serious challenge on India's path to inclusive growth and achieving decent working conditions. Therefore, the paper calls for sustainable wage policy intervention to ensure fair treatment to workers, equal pay for work of equal value, social protection and social justice to workers and to promote decent work and inclusive growth in India.