This is the first part in a two-part series of articles penned down by Centre for New Economics Studies (CNES) – Swabhimaan – InfoSphere’s latest editions. See here for more details on this special G20 focused InfoSphere edition and here for reviewing Team InfoSphere’s work. See here more details on a special G20 focused Swabhimaan edition and here for Team Swabhimaan’s work.
India assumed the presidency of the G20 forum from December 1, 2022 until November 30, 2023. The term of this ‘presidency’ is offered in rotation to all G20 members.
This special edition of long-form research analysis was undertaken by the Centre for New Economics Studies’ (CNES’) Swabhimaan and InfoSphere Team. In this piece, we closely analysed one of the key areas of discussion by India and other G20 members, i.e., issues concerning women-led development plans for the group.
We study the state of progress by looking into the G20 nations’ female employment levels and entrepreneurship conditions for women, while choosing a contrasting case reference of four different G20 countries, namely, Germany, Saudi Arabia, Mexico, and Russia. This will help one understand the paradoxical extent of realities facing the member nations.
Most G20 nations have contrasting trends when it comes to observing their performance in terms of women’s labour force participation rate, female employment rates, and leadership/entrepreneurial conditions for women.
We argue that a more ‘gender-inclusive’ and ‘women-focused’ (re)imagination of growth and developmental priorities may help each of the nation’s developmental goals to be achieved in convergence with the aggregate realisation of a collective public good for the grouping.
As an anecdotal caveat, our teams here acknowledge the use of the term ‘gender’ as a socially constructed marker, which relates to not just women alone but also other gendered groups (LGBTQ+ communities).
In this two-part analyses, given the specific data and context on women-based gender performance scenarios, drawn in alignment with the G20 agenda, we interpret our findings for the women-specific case itself.
What do the findings say
To begin with, Germany is considered a leader of the European Union and has a great influence on the G20.
Saudi Arabia is an economic power in the Middle East (or otherwise the West Asia) region, which has been historically known as the zone of conflicts and wars.
Russia, which represents the legacy of the Soviet Union, is a country which was founded on the principles of equality. And, lastly, Mexico, situated in the south of the US and Canada, is often overlooked by various analysts due to its limited strategic role in the G20 and being at a lower stage of development (compared to other industrially developed nations).
In the G20 cohort, India ranks last in the female labour force participation rate (FLFPR) at 19.23%, according to the Global Gender Gap Report 2022. The average FLFPR for the G20 countries is 49.78%. In addition, India rallies behind other G20 countries in wage gap levels as well as care work distribution.
Indian women perform 90.5% of the care and domestic work, which implies that while men spend 31 minutes, women spend 297 minutes on unpaid care work daily, per ILO 2018. Whereas the average for G20 countries, when it comes to women’s contribution to unpaid care work, is 70.77%.
Additionally, as per the Global Gender Gap Report 2022, Indian women, on an average, earn $2.13K annually as compared to $9.90K earned annually by Indian men, implying that men earn 78% more than women in India.
While other nations have seen a rise in women’s employment, India’s FLFPR has declined since 2004. This is quite unprecedented as factors that usually contribute towards a low LFPR, which are a high fertility ratio and low education rates, no longer hold true for India.
India has seen a reduction in fertility from 4 to 2.5 children per woman. Additionally, India has also seen a rise in girls’ enrolment in primary education and has seen female enrolment, for women aged 15-24, in any educational institution go from 16.1% to 36% (ILO 2014). This change in these factors in the recent decades should correlate to an increase in FLFPR; however, the opposite is happening.
As per World Bank estimates, in 2004, India’s FLFPR was 30.2% which fell to 22.9% in 2021. The World Economic Forum pegs India’s FLFPR even lower at 19.23% in 2022, in their Global Gender Gap Report 2022.
When it comes to care work distribution, countries in Europe (except Italy), the UK, the US and Canada are the most favourable performers, averaging around 61% of unpaid care work being performed by women.
These countries perform better in this criterion because their governments are capable of and choose to invest in social care. Whereas in much of the scenario seen in developing countries like India, the burden falls heavily on women alone. This implies that the time that they could be utilised for formal wage-earning labour, they spend on caring for their families, for which they accrue no compensation.
One of the biggest reasons for a persistently low FLFPR in India is that most of the Indian women’s day revolves around care work. Women are seen as primary caregivers in India. Indian women perform 90.5% of the required care work (297 minutes), as compared to the 9.5% (29 minutes) performed by men. Even when this work is outsourced, and a domestic help is hired, women are still responsible for ensuring the quality of care.
Additionally, even when households hire domestic labour, women of the household find themselves contributing to another form of unpaid care work, rather than joining the workforce. An ILO study on India’s metropolitan cities of Bengaluru and Chennai found that 40% of households hire domestic work to free up time to focus on care for elders and children and 30% of households hire a domestic help to alleviate the burden of housework. It was found that in only 8.5% of households in Chennai, and 13.5% of households in Bengaluru, a domestic help is hired to free up time for paid employment.
Reasons for wage gap in India
India has the highest wage gap among the G20 countries, with Indian men earning 78% more than Indian women. On an average, in the G20 countries, men earn 43% more than women. This means that the gender pay gap is among the widest in the world in India.
India has a heterogeneous economy where wage inequality exists between groups and within groups. For instance, the wage differential is higher in rural areas as compared to urban areas and wage inequality among regular workers is considerably higher than that among casual workers. This is an example of inequality between groups.
Now when one observes the gender wage gap, it is an inequality that exists within groups. Surprisingly, gender wage inequality among regular workers is higher than among casual workers.
A phenomenon termed as ‘sticky floor’ occurs within the regular salaried workers where there is a higher wage gap at the lower end of the wage distribution.
(‘Sticky floor’ is an expression used as a metaphor to point to a discriminatory employment pattern that keeps workers, mainly women, in the lower ranks of the job scale, with low mobility and invisible barriers to career advancement.)
In India, while individual characteristics such as education, skills or experience may be attributed to the gender wage gap, the overwhelming part of the wage gap is discriminatory on the basis of one’s gender and sex.
Not only that, studies have shown that the intersection with their social and religious identity further marginalises women in the workforce.
Scheduled Caste women are likely to be concentrated at the lower end of the wage distribution. There are certain reasons for the phenomenon. Firstly, there is statistical discrimination practised by employers because they find male employees more reliable and stable.
There is an inherent assumption that female employees would temporarily or permanently leave work because they have to fulfil their ‘responsibility’ of getting married and raising children. The ones who have received more education and belong to the urban elite class are usually in a position where they are aware of their rights under Article 39 or the Equal Remuneration Act, 1976 and are able to assert them.
The same awareness is not present among those earning wages on a lower scale.
Another explanation for the wage gap is that men and women rarely occupy the same positions and occupations in society. There is almost a stereotypical segregation of jobs. Some jobs are considered as “male” jobs and some are considered as “female” jobs. This reflects in the educational choices, too.
Scholars like Ashwini Deshpande say that increasing female labour force participation and increasing women’s share in regular wage jobs is necessary to reduce the wage gap. Moreover, women must earn wages that are commensurate with their qualifications.
Though India has legislation in place, including the 2017 amendment to the Maternity Benefits Act, it would still take approximately 70 years to close the gap completely. If one analyses the policies in France, there is a Cope-Zimmermann law that established quotas for the gender balance of company boards.
With the representation of women in managerial and board positions, there can be a decline in the wage gap rate. France has also aimed at raising awareness and providing training on gender issues for all employees. There cannot be a direct application of policies to India as a vast section of the economy is informal and does not come under the ambit of regular salaried workers.
Evidence shows that Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005 benefited rural women workers and helped reduce the gender pay gap, both directly and indirectly.
The scheme directly raised the pay levels of women workers who participated in the programme, and indirectly benefited women involved in agricultural occupations through higher earnings. However, as MGNREGA contributed to the rapid rise in the overall rural and agricultural wages in the country, there have been recent budget cuts for the same. Therefore, there is a need to make distinctions and implement strong policies to reduce the gender wage gaps.
In Germany, women’s employment has grown dramatically during the previous several decades. According to Eurostat, Germany had a higher employment rate for women in the 20-64 age range in 2020 – 73.8% – as compared to the EU average of 67.3%. Yet, there are persistent gender disparities in employment rates, especially at upper management levels and in some industries.
The gender wage gap, which was 18% in 2020, according to Eurostat, is a problem for women in Germany. Thus, women in Germany make 18% less money than menales do on average. Among Germany’s top firms, women occupied just 29.5% of managerial roles, according to a 2020 research by DIW Berlin.
Germany pledges to initiate a programme to boost women’s professional qualifications in developing nations and encourage women’s entrepreneurial empowerment, calling for women to take a more prominent role in politics, the economy, and society. It understands that there is still room for change in Germany and has taken strides forward by expanding childcare alternatives and implementing legislation regarding women in leadership roles.
Earnings of men and women in Germany
Men earned an average of €24.36 ($25.94) gross per hour across all industries, while women earned €20.05 ($21.35) pre-tax. In 2022, the gender wage gap varied significantly among economic sectors. “Financial and insurance activities” and “professional, scientific, and technical activities” were the most important (both 27%).
In “information and communication” (22%) and “human health and social work activities” (21%), men earned more than women. Earnings differences are also very significant in the branches of “trades, maintenance, and repair of motor vehicles” (22%), and “manufacturing” (21%), where men are typically more represented than women. In the sectors “mining and quarrying” (2%) and “transport and storage” (3%), the gender pay difference was rather small. Yet, only a few women worked here.
The gender pay gap, which compares the average gross hourly salaries of men and women, was 18% in Germany in 2021. Likewise in prior years, this was much higher than the average for the EU (13%). While the EU average may not seem like much, it can equal about two months of a person’s yearly wage.
Reasons for gender pay gap in Germany
While female employment has increased in recent decades, many sectors of the economy are still dominated by men. Mechanical engineering, construction, civil engineering, and freight transportation are among such industries. The service industry, on the other hand, employs a substantially higher proportion of women. They include positions in healthcare, social services, and education.
The economic expense of motherhood appears to be one of the primary drivers of Germany’s gender pay gap. “Mothers stay at home for a relatively long time after childbirth, resulting in shorter periods of productive employment compared to men,” Friederike Maier, vice director of the Harriet Taylor Mill Centre for Economics and Gender Studies, explained. “When women return to the labour force, many of them find part-time work.” These jobs are concentrated in low-wage areas of the German economy, including retail commerce, healthcare, hotels, restaurants, and senior care.”
In 2017, only 9% of men in Germany worked part-time, compared to 47% of women.
Average retirement income for women
Women are worse off than men in terms of both average income and retirement income. According to the EU-SILC 2021 study, women aged 65 and above received a gross retirement income of €17,814 per year in Germany. Men in the same age group earned €25,407 in gross retirement income.
Pensions for old age and surviving dependents, as well as pensions from the private old-age provisions, make up retirement income. The income reference year is the prior year to the survey. The Federal Statistics Office said that the gender pension difference, also known as the retirement income gap, is 29.9%.
The indicator refers to female labour force participation as a percentage of overall labour force participation. A country’s labour force or workforce consists of the number of persons of working age who are either employed or looking for work. This would typically encompass everyone of working age (defined in most countries as over 15 or 16 years old and under 60-65 years old) who is able and willing to work.
Individuals who are not of working age (such as students and retirees) are omitted, as are people of working age who are not looking for a job in the period under consideration, either voluntarily or owing to other constraints (such as stay-at-home parents and people in prisons or similar institutions).
The graph shows that a large number of women – and correspondingly fewer men – worked in office and service occupations as well as in the commercial sector. Hence, female labour force participation in the tertiary sector is encouraging. However, while the proportion of women in crafts and in the trade sector in 2021 remained roughly the same as compared to 1992, less female labour force participation was reported in the manufacturing sector in 2021 as compared to 1992 (18.3%). There is scope to improve the involvement of women in the secondary and primary sectors.
In recent years, Germany has fostered growth and involvement of women in the workforce. This change can be broadly classified into the following major categories:
● Women’s quota and pay transparency: The German government has adopted certain measures to introduce mandatory employment quotas for women, alongside making regulations to foster pay transparency and parity through the Pay Transparency Act, which was introduced in 2017.
● Return from full-time to part-time work: Women, on account of bearing household responsibilities and the exceptional circumstances during the COVID-19 pandemic, indulged in undertaking part-time rather than full-time work. In order to allow for their full-time integration into the labour force, the government has taken special initiatives for their absorption into full-time positions.
● Introduction of parental allowance: To foster gender parity among men and women in handling parental responsibilities, the government has introduced parental allowances for both men and women.
● Gender Care Gap Project: The German government launched this project to ensure equal division of unpaid care work between men and women. Women spend 52.4% more time on unpaid care work than men. The introduction of such projects will allow for bridging this gap in the near future, thereby encouraging more women to enter the paid employment sector.
● Instituting maternal leave and paid holidays: Such provisions further create conducive situations for women, who are responsible for running homes alongside their professional careers.
● Special campaigns to encourage women in STEM (Science, Technology, Engineering and Mathematics): More women are being encouraged to enter the conventionally male-dominated professions by catering to specific needs on this front. The German Association of Women Engineers has started a campaign to encourage women in STEM.
A value of 100% in the above graph would mean that women have the same opportunities in society as men. Germany is doing well vis à vis other nations, and this can be attributed to the changing policies and reforms in the country, especially the introduction of employment quotas for women in 2016.
According to figures published by the Federal Employment Agency (BA), roughly 71% of women in Germany have a job today – almost 10% more than the average for OECD countries.
Women are still treated less properly than men in the 21st century, despite advances in knowledge, science, and human rights. Women in OECD countries have less professional possibilities, have more barriers to meaningful employment, encounter high levels of harassment, and earn 14% less than men. This is intolerable. Gender equality and women’s empowerment are human, political, social, and economic imperatives. These are among the top priorities for OECD nations.
Problems faced by Mexican women
Mexico faces significant hurdles in this area. Fewer than half of working-age Mexican women participate in the labour force. This is the second lowest rate in the OECD, and significantly lower than the rate for Mexican men in the labour force, which is 82%.
About 60% of working-age women work in informal occupations with little social protection, significant insecurity, and low income. The enormous unpaid job burden hinders them from committing time to formal work, and this is one of the causes of the low participation. In fact, Mexican women do three-quarters of all unpaid domestic labour, including childcare.
The long-hours work culture makes it difficult to achieve a healthy work/life balance. The media’s persistent promotion of gender stereotypes further limits women’s liberation. Mexican mothers and young women face significant challenges in finding paid work. The proportion of young women who are not in employment, education, and training (NEET) is 33%, which is 18 percentage points more than the OECD average.
Female labour force in Mexico
In 2021, when the FLFPR in Mexico was 43.81%, the global average based on 180 nations was 50.13%.
We analysed that women in higher education in Mexico either nearly reached parity or exceeded it in 2018-2019. In fact, in postgraduate programmes, women’s enrolment exceeded that of men. However, for women in Mexico, a college degree is not a guarantee of employment. Nearly 75% of women with college degrees are unemployed in the formal economy.
Gender gap in Mexico
In the second quarter of 2022, 57 million individuals, with 34 million men (60%) and 23 million women (40%), aged 15 and above, were employed in the formal and informal sector, across the world. In Mexico, 44% of the working population is employed in a formal vocation, while 56% is employed informally.
Over the last 17 years, women’s economic involvement has ranged between 40% and 45%. The majority of working women have been employed in the informal economy (13 million women at 56%) while 10 million women work in the formal economy (44%).
Informal sector work is connected with lower salaries, less social security coverage, and a higher risk of workplace violence.
Separately, women (89%) are more likely than men (43%) to be subordinates in the workplace. Men (43%) have more opportunities for self-employment than women (7%). Surprisingly, both men and women have a low proclivity to become employers (5% for men and 4% for women).
Women (11%) are more likely than men (43%) to be unpaid employees in the informal labour market. In the informal sector, men (34%) considerably outweigh women (2%) in terms of employment. Surprisingly, men and women have different patterns in terms of self-employment and being subordinate workers in the informal sector.
The gender gap indicated in the graph above aims to measure the equality of opportunity that men get vis à vis women. Although Mexico had an overall gender gap of 24% in 2022 (which is significantly high), it was surprisingly considered one of the best Latin American countries in this regard.
However, there is a stark difference in the gender gap across areas. For example, political empowerment has a significant gender gap vis à vis educational attainment and health and survival. The gender gap with respect to economic opportunity and participation is also quite high. This can be attributed to the fact that more than half of Mexico’s population is engaged in the informal economy, with women (58.8%) more likely than men (50.1%) to hold informal jobs. There are various barriers that women face which have caused such gender gap indices that are discussed in the forthcoming section.
Barriers for women in employment opportunities
There are many barriers which prohibit Mexican women from working. Firstly, prior to marriage, nearly 64% of women worked full-time. Only 57% of highly qualified women and 44% of low-skilled women continue to work full-time after marriage.
For moms with children under one year old, the figure drops even further: 49% of highly qualified women and 35% of low-skilled women continue to work full-time. Secondly, having children has a “penalty” in the labour market.
According to Martinez et al. (2021), moms in Mexico have a 4.4 percentage point lower labour force participation rate when compared to childless women. Similarly, the OECD (2015) finds that it is more difficult for women in Mexico to participate in paid work when their children are younger since younger children are less autonomous and there is a scarcity of inexpensive formal daycare.
When women return to the labour force after having a child, they face a wage penalty. This compensation penalty could be attributed to mothers working fewer hours in paid employment and being recognised as having less (paid) job experience than peers who did not take a career break.
Lastly, women are responsible for most of the household care, which may cause them to abandon their careers, either temporarily or permanently, or to shift to part-time work.
The next part of the analysis studies the gender-performance context of G20 countries like Saudi Arabia and Russia while delving deeper into the landscape of ‘entrepreneurship’ and women-based leadership positions for the identified G20 countries.
Deepanshu Mohan is professor of Economics and director, Centre for New Economics Studies (CNES), Jindal School of Liberal Arts and Humanities, O.P. Jindal Global University. CNES Team Swabhimaan includes senior research assistants Tavleen Kaur, Shreeya Bhayana, along with research assistants Archisha Tiwari and Aarjavi Shah. Team InfoSphere includes research assistants Yuvaraj Mandal, Bilquis Calcuttawala, Nishit Patil, Amisha Singh, Vedika Singhvi, Raghav Chawla.