This is the first of two articles to be published on The Wire analysing the findings from Oxfam’s India Discrimination Report 2022.
New Delhi: That religious, gender and caste minorities in India are discriminated against, particularly in the labour market, is accepted knowledge. However, until now, there have been few efforts to quantify this discrimination.
The 2022 edition of Oxfam’s India Discrimination Report attempts to quantify the discrimination faced by caste minorities (members of Scheduled Caste and Scheduled Tribe communities), religious minorities (in this case, Muslims) and gender minorities (women) – and the results are alarming.
The Oxfam report finds that gender discrimination in India is “almost total” when it comes to finding regular employment in urban areas; and for rural areas in this regard, we can drop the ‘almost’.
Further, for members of the SC/ST community, discrimination is quite low in urban areas, but in rural India, the figures are much higher.
This article explores both the extent of discrimination faced by these three identities in India’s labour market as well as the reasons for the same, both in terms of employment and wages. What’s more, it breaks down the findings on the basis of types of employment (regular, self-employment and casual work) as well as for urban and rural areas.
How discrimination is being measured
In order to understand the findings of the Oxfam report on the extent of discrimination faced by particular social groups, we must first understand how discrimination is measured in the report.
Typically, discrimination is defined as a situation wherein people having identical abilities are treated differently in labour and capital markets. In order to quantify these differential outcomes, the Oxfam report uses a statistical method called ‘decomposition’.
Decomposition bifurcates the gaps in socio-economic outcomes (for instance, wages earned) between two groups (let’s say, men and women) on the basis of two factors – endowments and discrimination.
Endowments refer to the capabilities and qualifications an individual has. While considering labour market discrimination, for example, the Report considers endowments such as education levels of an individual, their age (as a proxy for years of work experience), the education level of the head of the household, and so on.
When an increase in an individual’s endowments result in a commensurate increase in their socio-economic outcomes, discrimination is said to be low. However, when one group experiences an increase in outcomes due to an increase in endowments and another group doesn’t, the second group is seen as being discriminated against.
While specific forms of discrimination are brought out in detail through examples later in the article, one illustrative example of this could be a case of ‘highly-educated’ women in rural employment. Despite having educational qualifications at par with or greater than those of men, many women remain outside of the workforce for a variety of socio-cultural reasons, such as the ‘status’ of the family or women’s household responsibilities.
The difference in the outcomes of men and women despite their having similar endowments is the extent of discrimination they are facing.
It is important to note here that the discrimination being measured in the above example is not solely discrimination by the employer – it is a sum total of all the discrimination women are facing due to their gender identity; caused by historic inequalities, social norms as well as the employer’s own attitudes.
As such, in the report, discrimination has been defined as that part of disparity or inequality that can be attributed to the differences in gender, caste and religion that is considered unacceptable given the prevailing ethical, moral and legal system in our country.
The Oxfam India report refers to unit level data from the 61st round National Sample Survey (NSS) data on employment-unemployment (2004-05) and the Periodic Labour Force Surveys (PLFS) in 2018-19 and 2019-20 in its calculations on labour market discrimination.
Labour market discrimination
The Oxfam report measures discrimination in the labour market with respect to two outcomes – employment and wages/earnings – on the basis of three social identities – gender, caste and religion. Further, it divides the findings for urban and rural areas.
While measuring discrimination in employment opportunities on the basis of caste and gender, the report considers three categories of employment as described in the PLFS – ‘regular/salaried employment’ (R), ‘self-employment’ (SE) and ‘casual employment’.
For caste- and gender-based discrimination, R/SE is considered desirable because they are generally regarded as providing higher earnings, respectability and safety. As such, casual employment is seen as undesirable.
Low discrimination against SC/STs in Cities
In urban areas, caste-based discrimination in employment was found to be low in the Oxfam report, only registering a marginal increase over the years as the measurable endowments of people belonging to the SC/ST communities have improved, perhaps due to the success of asset creation through government policies, such as reservation.
As per the PLFS, during the year 2019-20, 37.5% of the SC/ST population were engaged in R/SE jobs in contrast to 41.3% of the non SC/ST population. This difference is marginal and can largely be attributed to differences in endowments of the two groups.
While other literature considered in the Oxfam report has pointed at caste-based discrimination in employment, the report itself shows that 98% of inequality between SC/ST and non-SC/ST groups can be attributed to endowments, meaning discrimination only accounts for 2% of the inequality.
In rural areas, caste-based discrimination in employment is higher than in urban areas.
As per the PLFS 2019-20 data, the share of SC/ST workers in rural India in R/SE was 35.2% while that of non-SC/ST workers was 41.5%. As the Report notes, endowment factors make up most of the 6.3-percentage-point differential.
While endowments accounted for the majority of the differential in urban areas, discrimination accounts for a large portion of the same in rural areas. In 2004-05, the component attributable to discrimination stood at 80%. However, it fell to 51% in 2018-19 and then rose slightly to 59% in 2019-20.
Despite a decline over time, caste-based discrimination in rural areas remains high.
‘Almost total’ discrimination against women
Gender-based discrimination in employment opportunities is extremely high in both urban and rural areas. Gender discrimination is “almost total” in India, according to the findings detailed in the report, meaning that a women’s endowments have little to no bearing on the probability that she will be employed in R/SE.
In urban areas, 60% of men are engaged in R/SE categories whereas this is merely 19% for women. Further, it is observed that improvements in endowment factors increase the probability of getting R/SE employment for men more than they do for women. For instance, while an increase in age increases the probability of getting ‘desirable’ employment for both men and women, this positive effect is greater for the former than for the latter.
As such, the report found that endowments only account for 2% of the difference in employment outcomes for women as compared to men, meaning discrimination accounts for 98% of inequalities between the genders. In fact, gender-based discrimination is so severe that there is little to no difference between women from the general category or those from marginalised groups, such as SC/STs or Muslims.
What’s more, this figure has shown no improvement since 2004-05.
Gender-based discrimination is even higher in rural areas. While 53.8% of the population of men aged 15 and over are engaged in R/SE, the figure for women is only 23.3%. And men register a greater increase in the probability of getting R/SE jobs than women for an increase in all endowment categories – years of education, age, and education of the household’s head.
In fact, while the coefficient of impact (the amount by which improvements in endowments improve outcomes) is always positive and greater across endowments for men, it is negative for the household head’s education when it comes to employment for women in rural India – meaning as education levels of the household’s head go up, the likelihood of a woman being employed in R/SE actually goes down.
According to the report, this suggests that any “social capital” gains in terms of the education of the head of the household reduces women’s probability of participation in R/SE, implying that women from such households are less likely to seek and get jobs.
Here, it is not as though these women are being discriminated against by the employer, but women from well-educated and economically better-off households in rural areas are less likely to join the workforce because of socio-cultural norms and expectations – the patriarchal expectations society imposes on women.
“Women do not enter the labour market due to ‘family reasons’, a lack of safety associated with travelling and timing requirements of jobs in addition to esoteric reasons ranging from ‘societal norms’ and practises that associate respectability with staying out of the workforce for women. While a large number of educated women are, thus, ‘choosing’ not to work,” the Report notes.
Moreover, the level of a woman’s own education has no bearing on her probability of getting employment in R/SE. Gender discrimination is total in rural India.
Low discrimination against Muslims driven by poor educational outcomes
Unlike for the two types of discrimination described above, for religion-based discrimination in employment, the ‘self-employed’ category of work comes into play. This is explained in the report through sociological insights which indicate that for Muslims, self-employment is usually a result of being forced into the family business despite lower earnings, due to a dearth of other options.
As such, only ‘regular’ employment is considered desirable with regards to religion-based discrimination in employment in the Report.
In urban areas, PLFS 2019-20 demonstrates that 15.6% of Muslims above the age of 15 are engaged in ‘regular’ jobs whereas the corresponding figure among non-Muslims is 23.3%; a difference of 7.8 percentage points.
Decomposition analysis shows that 68% of the gap is explained by discrimination while differences in endowment explain only 32% in the reference year. It is worrying to note that discrimination accounted for only 59% of this employment discrepancy in 2004-05, showing a significant increase of nine percentage points between the two years.
It must, however, be noted that these figures cannot be compared to those of caste- or gender-based discrimination because the definitions of ‘desirable’ employment are different, as noted above.
In rural areas, however, discrimination against Muslims in employment is relatively low. While 5.8% of Muslims above the age of 15 are able to find regular employment, this figure for non-Muslims is 6.9%; a difference of only 1.1 percentage points. This highlights that religious identity is not a major factor in access to rural jobs. However, these figures correspond to 2019-20; in 2004-05, discrimination accounted for 29% of the employment gap between Muslims and non-Muslims.
While the decline in rural discrimination against Muslims in employment is certainly positive, part of this decline is explained by lower levels of improvement in educational achievements for the community in the intervening years. This, in turn, caused endowments to fall and thus contributed to the reduction of the measurement of discrimination.
Discrimination in earnings/wages of the three social groups under consideration has been detailed separately for regular, casual and self-employment and has, once again, been delineated between urban and rural areas in the Report.
For self-employed SC/STs in rural areas, low wage gap but high discrimination
According to PFLS 2019-20 data, in urban areas, the mean income of people in regular employment belonging to the SC/ST community stood at Rs 15,312 against Rs 20,346 for people from the ‘general’ category.
This discrepancy, however, is largely accounted for in terms of endowments; endowments make up 96.6% of the wage discrepancy, meaning discrimination accounts for only 3.4%. This is likely due to the country’s legal system which mandates employers pay employees similarly, irrespective of caste backgrounds, thereby not allowing employers’ prejudices to factor into the wages earned by employees.
In rural areas, however, this discrepancy is much larger. Average earnings for members of the SC/ST community employed in regular jobs in rural areas was Rs 11,463 in 2019-20 as compared to Rs 13,440 for non-SC/STs, and 19% of this gap is due to discrimination. This discrimination figure cannot be dismissed as trivial given that it is in case of regular employment largely consisting of organised sector work in rural areas.
When it comes to self-employment, average incomes are lower and discrimination is higher.
Self-employed members of SC/ST communities in urban areas earned, on average, Rs 10,533 as compared to Rs 15,878 for non-SC/ST members. The report chalks up the lower earnings in the self-employed category compared to the salaried category to a lower quality of work.
While all three endowment factors show positive correlations with outcomes for both the SC/ST and non-SC/ST in self-employment, the impact is greater for the latter. The report notes that discrimination accounted for 35% of the discrepancy in 2019-20.
For self-employment in rural areas, the average earnings of SC/STs was Rs 7,337 while that of non-SC/STs was Rs 9,174. Discrimination accounts for 22% of this gap.
In casual work in urban areas, the wage gap between individuals from the SC/ST and non-SC/ST categories is small, with the former earning Rs 8,004 on average and the latter, Rs 8,626. However, discrimination between the two categories is high.
The Report found that caste-based discrimination accounted for 79% of this wage discrepancy in 2019-20, which has remained consistent since 2004-05. The high discrimination despite the wage gap being low is due to the fact that the differences in endowments between the two groups is very small.
In rural areas, the wage gap remains modest as SC/ST members in casual employment earn on average Rs 6,464 while non-SC/STs earn Rs 6,736. Further, discrimination is also lower than in urban areas at 45.7%. However, this figure has been increasing since 2004-05.
Discrimination lower against women over 25
Men in urban areas in regular employment earn Rs 19,779 compared to women, who earn Rs 15,578. However, while caste-based discrimination was mitigated by protections afforded by India’s legal system, this is not true for gender-based discrimination.
Discrimination accounted for an alarming 67% of this wage differential in 2019-20; only a marginal improvement from 72% the previous year.
What is interesting to note, however, is that the extent of discrimination shifts to 54% in 2019-20 and 55% in 2018-19 when only women above the age of 25 are considered. Two explanations are proffered for this – that older women, with the benefit of age and experience, are able to bargain for higher wages; and that younger women are discriminated against more because disruptions to work through events like childbirth and marriage weaken the strength of their endowments in the eyes of employers.
This wage gap maintains a similar magnitude in rural areas, with men earning on average Rs 13,600 per month and women, Rs 9,757. However, the role discrimination plays in this wage gap is considerably higher in rural India.
In 2019-20, discrimination accounted for 91.1% of this wage gap, down marginally from 94.8% the previous year. Again, however, discrimination accounts for a smaller portion of the wage gap (77%) for women above the age of 25.
The wage gap between men and women in self-employment in urban areas is described in the Report as “overwhelming”. While men under these conditions earn Rs 15,996 on average per month, women earn merely Rs 6,626 – less than half.
Discrimination, too, is severe, accounting for 83% of the wage gap in 2019-20 and unlike in the case of regular employment, the figures remain similar for women over the age of 25. Further, the scenario has become worse since 2018-19, when discrimination stood at 77%.
The high discrimination against women here is explained largely by social, cultural and mobility constraints in urban scenarios.
For rural, self-employed women, the wage gap remains egregious. Men here earn an average monthly income of Rs 9,348 while women earn Rs 4,383. Discrimination remains high as well, accounting for 93% of this differential.
A similar situation prevails in the sphere of casual work. In urban areas, men earn Rs 9,017 on average per month and women, Rs 5,709. Further, discrimination accounted for 95% of this differential in 2019-20.
Again, women over the age of 25 experience marginally less discrimination at 93%, due to similar reasons as those mentioned above.
The figures from rural India in this regard are similar, with average monthly incomes standing at Rs 7,463 for men and Rs 4,605 for women, and with discrimination accounting for 96% of this differential in 2019-20. Further, discrimination has got incrementally greater against women since 2004-05.
Therefore, what emerges clearly is that women earn lower wages as compared to men across employment categories, in both urban and rural scenarios and this wage gap is overwhelmingly caused by discrimination. A woman’s endowments hardly figure into the equation.
‘Hidden’ endowments of Muslims
The wage gap between Muslims and non-Muslims was considerable in regular employment in urban areas, with the former earning a monthly average of Rs 13,672 as compared to Rs 20,346 of the latter.
However, endowments had a positive effect on outcomes for both groups and discrimination accounted for only a small amount of the wage differential (6.9%).
In rural areas, the wage gap shrinks to mere Rs 644, with Muslims earning on average Rs 12,796 per month and non-Muslims, Rs 13,440. What’s more, according to the report, endowments account for the full extent of the differential, meaning that discrimination does not figure into the equation at all.
A considerable caveat must be mentioned here – while educational attainment is, by and large, lower for Muslims, they have ‘hidden’ endowments in the form of training and experience in specific trades from the family and peer group. If these specialised, informal skills were considered as endowments for Muslims, the role of discrimination in the wage gap would undoubtedly shoot up.
As for the self-employment in urban areas, Muslims are highly concentrated in this category as they often choose to opt for low-paying family professions due to a lack of other options. Despite this concentration, however, Muslims only earn on average Rs 11,421 per month as compared to non-Muslims, who earn Rs 15,876.
Discrimination remains low at 11.9% in 2019-20 as endowments play a positive role for both Muslims and non-Muslims in determining outcomes. However, Muslims have an advantage when it comes to one endowment in particular – the education levels of the head of the household.
This is natural since for a family business, the household’s head’s education will affect the reputation of the business, which in turn, will drive turnover.
The wage gap remains small in rural areas as well, with average monthly wages of Muslims standing at Rs 8,375 and those of non-Muslims, at Rs 9,174. What is interesting here is that discrimination rose from zero in 2018-19 to accounting for 40% of the wage gap in 2019-20.
This was caused by a sharp dive in the earnings of self-employed Muslims with the onset of the coronavirus pandemic and the consequent nationwide lockdown in March, 2020. This issue is explained further in the next section of this article.
In 2019-20, the average monthly incomes of Muslims employed in casual work were actually higher than those of non-Muslims in urban areas, with the former earning Rs 8,772 and the latter, Rs 8,626. This can be explained through the aforementioned specialised jobs and skills Muslims inculcate through the family and peer group, which cannot however be added to their endowments because they cannot be quantified.
Similarly in rural areas, average monthly incomes of Muslims exceeded those of their non-Muslim counterparts at Rs 7,405 and Rs 6,736 respectively. In this special scenario, the special skills of the Muslim community seem to put its members at an advantage.
The next article in the series will analyse the impact of the coronavirus pandemic on discrimination with regards to the above-mentioned identities; discrimination in availability of agricultural credit; discrimination in access to inpatient care; and the recommendations made in Oxfam’s India Discrimination Report 2022.
This article, first published at 8.29 am on September 15, 2022, was republished at 1.57 pm on the same day.