Determinants of Gender Wage Discrimination in India: A Counterfactual Decomposition Analysis

NIKITA SONI, IIT Roorkee
FALGUNI PATTANAIK, Associate Professor

The study investigates the precarious position of women in the Indian labour market during the third decade of economic reforms. It addresses two main challenges faced by women: declining labour force participation rates and an increasing gender wage gap. By analysing demographic and job-related factors, the study explores their impact on wage differentials, reflecting socio-economic disparities. Utilizing unit-level data from the NSS Employment Unemployment Survey 2011-12 and PLFS 2018-19, the study employs OLS and Quantile regression methods to assess how socioeconomic factors influence wages across different segments of the income distribution. The research applies decomposition techniques such as the Oaxaca-Blinder and counterfactual methods by Machado and Mata (2005) and Melly (2006) to identify and quantify the "sticky floor" phenomenon, revealing persistent barriers hindering women's advancement. Findings indicate a concerning trend of diminishing female workforce participation alongside enduring gender wage disparities, particularly pronounced among less educated women. The study underscores the urgent need for targeted policies to mitigate these disparities, offering insights for enhancing gender equality in workplace environments and broader societal contexts.

Keywords: Inequality, Disadvantage and Discrimination, Gender Dynamics, Decomposition analysis, Data and Methods

See extended abstract.