Gender Based Segmentation in the Post-Reform Era: A Profile from India

When India opened its markets in 1991, it ushered in an era of rapid economic growth and globalization. The promise was one of unprecedented opportunity, a rising tide that would lift all boats. We imagined shiny new industries integrating India with the world, creating jobs, and building a new middle class. But for millions of people, especially women, that promise of integration has felt more like a story happening to someone else. While capital, companies, and goods now cross borders with ease, the labour market-the world of human work and wages-has not integrated in the same way. In fact, in many ways, it has become more divided.

This paradox, where economic growth coexists with deepening inequality, isn’t an accident. It’s a feature of a system known as labour market segmentation. This is the idea that we don’t all compete in one single, large job market. Instead, the market is broken up into many small, separate segments, and the segment you’re in determines your wages, your security, and your future. These divisions are the invisible walls that keep a software engineer in Bengaluru from ever “competing” with a garment worker in Tiruppur, or a male construction manager from competing with a female childcare provider. And one of the deepest, most persistent of these divisions is based on gender.

What is labour market segmentation? 🔗

Let’s break this down with a simple analogy. Imagine the entire economy is a giant amusement park. In a truly integrated market, one ticket would grant you access to all the rides. You could start on the merry-go-round and, with a bit of skill and luck, work your way up to the fastest roller coaster.

But a segmented labour market isn’t like that. It’s more like a park with different “zones.”

• There’s the ‘primary’ or ‘formal’ zone. This is the premier area with the high-tech roller coasters and comfortable attractions. The jobs here are stable, well-paid, come with benefits like health insurance and paid leave, and have clear paths for promotion.
• Then, there’s the ‘secondary’ or ‘informal’ zone. This area is crowded, and the rides are old and often unsafe. The jobs here are low-paid, temporary, and have no benefits or job security. Think casual day labour, street vending, or piece-rate work done from home.

Labour market segmentation is the study of the gates, fences, and rules that keep people in one zone from moving to the other. These barriers aren’t just about skill or education; they are often based on identity. Nationality, race, caste, and, most profoundly, gender, become the criteria that sort people into different zones, often for life.

Globalization’s great divide: integrating capital, segmenting people 🔗

The “neo-liberal” policies that drove globalization were designed to make markets more efficient. The core idea was to promote flexibility-let capital flow to where it’s most productive and let companies hire and fire based on demand. The result? Capital became hyper-mobile, but labour did not.

A multinational corporation can move its factory (and its capital) from one country to another in search of lower wages, but the workers in the original factory cannot so easily move to find new, better-paying jobs. This imbalance of power is the engine of modern segmentation. As one International Labour Organization paper points out, this system allows segmentation to be used as a strategy. By dividing the workforce, it becomes easier to manage and cheaper to employ. Why pay everyone a high wage when you can create a “secondary” segment of workers-often women-who are culturally expected to accept lower pay and more “flexible” (i.e., precarious) conditions?

This isn’t just a theory. It’s a lived reality. This strategy of capitalist hegemony ensures that the fruits of globalization are not shared equally. Some are denied those fruits based on who they are, not what they can do.

The neo-liberal impact on women’s work in post-reform India 🔗

In India, the post-1991 reform era put this dynamic on full display. The move towards “labour flexibility” dismantled many of the protections of the old formal sector, making employment more uncertain and precarious for everyone, especially men in traditional manufacturing jobs.

From certainty to precarity: a story from Mumbai 🔗

Consider the empirical evidence from a place like Shivajinagar, a resettlement colony in Mumbai. As traditional, stable jobs for men in the formal sector began to dry up or become more insecure, the economic ground shifted under entire families. The old model of a single male breadwinner became increasingly unviable. This uncertainty didn’t “empower” women by choice; it pushed them to seek an independent income out of sheer necessity.

But what kinds of jobs were available to them? Not the high-paying, secure jobs of the “primary” sector. Instead, they were funneled into the sprawling, unregulated informal economy. As one study on neoliberalism and gender justice highlights, the post-reform period led to a “feminisation of informal and precarious work.” Women became the new shock absorbers of the economy, concentrated in low-paid, low-skilled jobs like domestic work, home-based assembly, or selling goods on the street. These jobs offered a vital income but came with no security, no benefits, and a high susceptibility to poverty.

Occupational segregation: the invisible fences 🔗

This concentration of women in specific, undervalued jobs is known as occupational segregation. It’s the mechanism of segmentation. It’s the invisible fence that keeps women in jobs related to “care” or “nurturing” (like teaching, nursing, domestic work) or those supposedly requiring “nimble fingers” (like textiles or electronics assembly). These are jobs that are often seen as an extension of their domestic roles-and are paid accordingly.

This isn’t just an anecdotal feeling; it’s highly measurable. The Duncan Dissimilarity Index, for example, measures what percentage of men or women would have to change occupations for the workforce to be fully integrated. Research from IWWAGE (Institute for What Works to Advance Gender Equality) highlights that this segregation is a significant barrier. Between 2011-12 and 2019-20, gender-based occupational segregation in India actually *rose*, particularly in rural areas. This clustering in a few low-paying occupations guts women’s bargaining power and is a primary driver of the gender wage gap. They are, in effect, competing only with each other for a small pool of “women’s jobs.”

Why are women more vulnerable? The skills and education gap 🔗

A common argument is that this is purely a “pipeline” problem-that women are in these jobs because they lack the requisite education and skills. There is a painful truth to this. The same study of Shivajinagar, for instance, found a stark gender disparity in education. Illiteracy and lower educational attainment were overwhelmingly concentrated among females. This lower “human endowment,” as economists call it, makes women fundamentally more vulnerable in the labour market before they even seek their first job.

This educational gap reinforces segregation. As the IWWAGE analysis points out, households often make gendered investments in human capital. Families may be more likely to enroll boys in technology or engineering courses, while girls are guided toward humanities or arts. This limits the pool of jobs women are “qualified” for, creating a self-fulfilling prophecy that lands them in the secondary sector.

Interestingly, data often shows a U-shaped relationship between education and work for Indian women. Participation is high for women with no education (who must work to survive) and for women with high education (who can access primary sector jobs). It’s the women in the middle-those with secondary or some college education-who often have the lowest participation rates, caught between being “too qualified” for survival work and not qualified enough (or lacking the opportunity) for professional work.

A job as a survival strategy, not a choice 🔗

This brings us to a critical point. For a vast number of women in India’s informal economy, employment is not about self-actualization or climbing a career ladder. It is a critical survival strategy for the household.

A critical household buffer 🔗

In households perched precariously on the edge of poverty, a woman’s income-however small and irregular-is the buffer that absorbs economic shocks. It’s the money that keeps food on the table when the primary earner’s casual labour contract falls through. This role is essential, but it also traps women in the most flexible and precarious forms of work, as they must take whatever job they can get, whenever they can get it, to smooth over the family’s income gaps.

The ‘double burden’ holding women back 🔗

Even when a woman wants to work, she faces a barrier that most men do not: the crushing weight of unpaid care work. The responsibility for children, the elderly, and all household responsibilities falls almost exclusively on women. This “double burden” fundamentally constrains their ability to participate in the paid labour market.

This isn’t a minor factor; it is the single biggest determinant. A 2023 report on female labour utilization by India’s Directorate General of Employment found that the primary reason women are out of the labour force is “Child care/personal commitments in home making”. The presence of young children or elderly persons in the household, combined with a lack of affordable childcare, significantly reduces the probability of a married woman’s employment. She simply cannot be in two places at once.

New opportunities or a new crisis? 🔗

This paints a complex picture. The post-reform period wasn’t all bad. It undeniably opened new opportunities for *some* women, particularly educated, urban women in the burgeoning services sector (like IT, finance, and telecommunications). We all know stories of women who have broken barriers and achieved incredible success in these new fields.

But for the vast majority, the story is different. The persistence of wage and occupational discrimination, limited access to education, and the unyielding burden of household duties have created a powerful downward spiral. And the national data confirms this troubling trend.

One of the great paradoxes of the Indian economy is what economists call the “precarious drop” in female labour force participation (FLFP). A World Bank study, analyzing National Sample Survey (NSSO) data from the high-growth post-reform period (1993-94 to 2011-12), found that India’s FLFP *declined* steadily and significantly. At a time when the economy was booming, millions of women were *leaving* the labour force, not entering it. This decline was sharpest in rural areas.

This data suggests that the “new opportunities” were not accessible to most. Instead of being pulled into better jobs, many women were either pushed out of work entirely (perhaps as rising family incomes allowed them to withdraw from undesirable manual labour) or funneled deeper into the precarious, informal, and often invisible parts of the economy. The crisis suggested by this disaggregate data is one of growing, not shrinking, gender-based inequality. Globalization may have integrated India’s capital with the world, but it left much of its female workforce segmented, undervalued, and behind.

What do you think? Given the deep roots of this segmentation, what steps do you think are most critical to ensure that economic growth in India translates into real opportunity for all women? Is fixing the ‘skills gap’ enough, or do we need to fundamentally re-value the unpaid and low-paid “women’s work” that props up the entire economy?

References

1. https://www.researchgate.net/publication/389440378_Neoliberalism_and_Gender_Justice_Examining_Economic_Reforms_and_Feminist_Responses_in_India
2. https://iwwage.org/gender-based-occupational-segregation-a-barrier-for-womens-economic-empowerment/
3. https://dge.gov.in/dge/sites/default/files/2023-05/Female_Labour_Utilization_in_India_April_2023_final__1_-pages-1-2-merged__1_.pdf
4. https://openknowledge.worldbank.org/entities/publication/20184d6a-3fe5-5942-a7ec-1c5f46f6f975