Economic Reforms and Their Gender Differential Impact on Labour

When we talk about “economic reforms,” it often sounds like a massive, abstract concept. In India, it instantly brings to mind the year 1991-a time of big changes that promised to unleash the country’s potential through trade, competition, and growth. The core idea was simple: a rising tide lifts all boats. But did it? When the dust settled, economists and sociologists began asking a more pointed question: did this rising tide lift all boats equally, or did it create new currents that left some struggling to stay afloat? This is especially true when we look at the impact through a gender lens. The economic reforms, driven by liberalization and a new focus on profit, didn’t just change our markets; they fundamentally reshaped the lives and vulnerabilities of working women.

The double-edged sword of reform 🔗

At its heart, the new economic model was built on two major shifts: trade liberalization and the state’s withdrawal from production. This meant opening up India’s borders to global competition and scaling back government-run industries (privatization). The new driving force was profit, and the new environment was the free market. On one hand, this was incredibly dynamic. It broke old monopolies and created entirely new industries, from bustling export houses to the gleaming tech parks that would soon follow.

But this new system had a sharp edge. When the state steps back, so does its role as a large-scale, stable employer with strong labour protections. In a purely profit-driven model, labour is often seen as a cost to be minimized. This shift made the entire labour force feel more precarious, more vulnerable. And this vulnerability wasn’t shared equally. The impact was disproportionately and adversely felt by women, who have historically been concentrated in the lower-paid, less secure segments of the labour market.

From protected jobs to precarious work 🔗

To understand this, we need to talk about the informal or unorganized sector. This is the vast part of our economy that operates outside of government regulation and social security nets. Think of home-based workers, street vendors, casual construction labourers, and domestic helpers. Long before the reforms, women were overrepresented in this sector. The reforms, in many cases, amplified this trend.

As large companies faced global competition, they sought to become more “flexible.” This often meant outsourcing production to smaller, unregulated workshops or even to individual women working from their homes. These women were not “employees” with rights; they were “contractors” paid per piece, with no sick leave, no maternity benefits, and no job security. As an International Monetary Fund (IMF) working paper noted, reforms that increase labour market flexibility can boost GDP, but without targeted gender policies, they often lead to a rise in informality, widening the gender gap in formal employment and wages.

A glimmer of change: what the data showed 🔗

This isn’t to say the story is uniformly negative. A fascinating snapshot emerged around the turn of the millennium from the 55th round of the National Sample Survey Organization (NSSO). This 1999-2000 survey provided one of the first comprehensive looks at the new employment landscape. It found something hopeful: in urban areas, the traditional gender differences in industrial and occupational distributions were actually lessening.

In simple terms, the lines dividing “men’s jobs” and “women’s jobs” were starting to blur, at least in the cities. What was driving this?

Export orientation as a new engine 🔗

The main driver was export orientation. The reforms had supercharged industries that produced goods for the global market, especially textiles, garments, leather goods, and electronics assembly. These industries, particularly the garment sector, created a massive, unprecedented demand for female labour. For millions of women, this was their first formal entry point into the paid workforce.

This was a classic structural change. Deregulation allowed these factories to spring up, and their business model often relied on the nimble fingers and perceived docility of a female workforce. This “pull” effect was significant. It drew women from traditional, unpaid domestic roles into the cash economy. While the pay was low and conditions were often poor, the simple fact of earning an independent income was, for many, a revolutionary first step.

Unfulfilled promises and persistent gaps 🔗

So, was the problem solved? Far from it. That “glimmer of change” was real, but it wasn’t the whole story. The prompt for this entire discussion is rooted in a crucial fact: despite these structural changes, overall reductions in inequality did not materialize. The new jobs created were often just new *types* of vulnerable jobs. A woman earning a wage in a sweatshop was still vulnerable, just in a different way than before.

This led to a new, sharp divide in the female labour force itself.

The great divide: the service sector boom 🔗

The post-reform era didn’t just give us garment factories; it gave us the service sector boom. Call centers (BPOs), software companies (IT), and financial services exploded. This new, modern sector also hired women in large numbers, offering white-collar jobs, air-conditioned offices, and significantly higher salaries.

But this boom almost exclusively benefited one group: educated, urban women. An English-speaking college graduate in Bangalore or Gurgaon saw her opportunities expand exponentially. Her life, her career path, and her economic power were transformed. However, her opportunities bore almost no resemblance to those of a low-skilled woman in a rural district or an urban slum. This fragmentation is key. The reforms benefited women, but not *all* women. They benefited those who already had a foothold-in education, social class, and location. For the majority, the stubborn disparities remained.

This is reflected in broader national statistics. Despite decades of growth, India’s overall female labour force participation rate remains one of the lowest in the world. Furthermore, occupational segregation persists, with women crowded into low-value-added industries, which in turn fuels a persistent gender pay gap.

The hidden story of work and value 🔗

Part of the problem is how we even define “work.” Economic data primarily tracks paid, formal employment. It struggles to see, let alone value, the mountain of work that happens outside this definition. And this is where the story of women’s labour gets truly distorted. A key report from 2005, the UN’s “Progress of the World’s Women 2005”, made a powerful case. It argued that globalization (the very process reforms are part of) had deepened insecurity for the world’s poorest, and “the further down the chain of quality and security, the more women you find.”

The double burden: working longer for less 🔗

This brings us to the finding noted in the 2005 Human Development Report (HDR): women work longer hours than men. This seems impossible, right? How can this be true when men dominate the “labour force”?

The answer is the “double burden.” Women were entering the paid labour force (the factory, the office, the farm) *in addition to* performing the near-totality of unpaid care work at home. This includes cooking, cleaning, fetching water and firewood, and caring for children and the elderly. This unpaid work is relentless, essential, and economically invisible.

A man’s “workday” might be 9-to-5. A woman’s “workday” is often 5-am-to-10-pm, blending her paid job with her unpaid one. This creates a state of “time poverty” that is a massive barrier to real advancement. You cannot attend an evening class to upskill, go to a union meeting, or even get enough rest to be productive if you have to rush home to cook dinner for the entire family. The reforms, by pulling women into paid work without challenging the domestic division of labour, simply placed a second burden on their shoulders.

Beyond the paycheck: why assets and ownership matter 🔗

This leads to our final, and perhaps most profound, point. For decades, policies aimed at “empowering women” focused on jobs and income. But what if that was only half the solution? What if a paycheck, in a vulnerable job, isn’t enough to change your life?

This is the question at the heart of the research by economist Bina Agarwal. She looked beyond income and at the foundations of economic security: wealth and assets. Specifically, she studied the link between women’s ownership of immovable property-like a house or a piece of land-and their life outcomes.

A plot of land, a roof of one’s own 🔗

Her findings were nothing short of groundbreaking. In a landmark study, she and her colleagues found a direct, powerful, and negative correlation between a woman’s property ownership and her risk of suffering domestic violence. The statistics were (and are) staggering. As her research summary notes, one study in Kerala found that while 49% of propertyless women reported experiencing long-term physical violence, that number plummeted to just 7% for women who owned both land and a house.

Why? Property is not just money; it’s power.

• It’s a credible exit option. A woman who owns or co-owns her home knows that she will not be homeless if she leaves an abusive partner. This simple fact changes the entire power dynamic.
• It’s a deterrent. The abuser *knows* she has an exit option and is less likely to escalate violence, fearing she will leave.
• It’s social status and respect. An asset-owning woman is seen differently by her family and her community. She has a tangible stake in the household, giving her a stronger voice in decisions.

This is the crucial, final piece of the puzzle. Economic reforms that focus only on liberalizing markets and creating “flexible” jobs will always fall short. They may create income, but they don’t automatically build security. True economic empowerment is a three-legged stool: a secure income, a manageable workload (both paid and unpaid), and a claim to assets. The story of economic reforms in India shows us that while we’ve made some progress on the first leg, we have barely begun to address the other two.

What do you think? Based on this, if you were a policymaker, what one change-beyond just creating jobs-would you prioritize to reduce women’s economic vulnerability? And how can we start to measure “economic progress” in a way that truly values the hidden work and persistent inequalities women face?

References

1. https://www.imf.org/external/pubs/ft/wp/2016/wp1616.pdf
2. https://innovapolis.ca/socioeconomic-impacts-of-the-gendered-pay-gap-in-indias-labour-force/
3. https://www.unwomen.org/sites/default/files/Headquarters/Media/Publications/UNIFEM/PoWW2005_eng.pdf
4. https://www.binaagarwal.com/popular%20writings/Women&Property_domestic%20violence_P&P_2007.pdf