Analyzing the growth trajectories of

India and China with special

reference to women’s economic

roles

Devaki Jain, N C Saxena, Aruna Kanchi and Tang Lixia

With strong support from Dr. Hans Binswanger

Assisted by Deepshikha Batheja

1

In Sum

• Initial conditions similar�Large population - Enormous Labour force- 800

million in China, 473 million in India�Presence of hunger and poverty

• Reform Triggers very different• Employment wise better deal in China than India for

women• Current employment trends similar• Embedded inequality in sharing of care economy

due to patriarchal notions

2

Contents

• Macro trends overall sectoral with special reference to Male/Female employment

• Employment outcomes with reference to gender equality and its variations over time

• Gender parity in terms of wages and Social security benefits in the two countries

• Relationship between structures of governance and women

3

Source: World Bank Reports

India GDP- Post reform growth (1991-2011)

China GDP - Post reform growth (1978 to 2010)

Source: World Bank Reports

4

Sectoral GDP Growth

• China moved from Agriculture to Industry in the 1970s and then got on to services. Agriculture has taken an increasingly smaller role.

• India has moved very slowly on industry but faster in services.

• The employment impact of these growth paths

�notice that agriculture is still the major employer of women in both countries.

5

0

100

200

300

400

500

600

700

800

1990 1995 2000 2005 2010

mil

lio

n

Year

China - Population & Laborforce Growth

Population Men

Population Women

Labourforce Men

0

100

200

300

400

500

600

700

1990 1995 2000 2005 2010

million

Year

India -Population & Laborforce Growth

Population Men

Population Women

Labourforce Men

6

Population and labourforce growth in

the two countries• China and India have enormous labour forces • Both labour forces have been growing �China added 200 million to her population and 156 million to

her labour force between 1990 and 2010. � India added 351 million to her population and 142 million to

her labour force between 1990 and 2010.

• Bulk of the population resides in rural areas and agriculture dominates as source of employment in both countries.

• Men dominate the labour market in both countries with more or less comparable participation rates.

�Chinese labour force- ratio of men to women was 55:45 (2010)

� Indian labour force- a more skewed ratio of 75:25

7

Analysis of Employment

characteristics- India and China

8

India (1)

• Workforce increased in absolute terms

• Sharp decline since 2004-05 in women’s employment in India has certain defining characteristics distinct from those of men’s employment.

• Explanations for the decline in WPR of women�Rise between 1999 and 2005 was distress employment - mostly

in form of subsidiary status and unpaid family labour which withdrew when conditions became normal (Himanshu 2011, Neetha N 2011)

� Increase in educational enrolment�Shift of women into domestic work� Income effect- Majority of women who withdrew from the

labourforce were poor women (Kannan and Raveendran, 2012) who withdrew as a result of increase in family incomes.

9

India (2)

• Most of the non-farm jobs in manufacturing, trade etc going to men

• Men have four times more number of jobs than women in this sector

�Women restricted to agricultural labour and agricultural self-employment with limited economic rewards

�Deterioration in the quality of employment –Jobs in construction and other services largely informal, temporary, casual and poorly paid.

10

India (3)

• Regular employment for women has been increasing much faster than for men

• Most of the women distributed between self-employment and casual labour

• Important feature of self-employment in rural areas is large proportion of unpaid labour/helper

� almost 75% of self employed in rural areas, particularly in agriculture

� Unpaid women workers almost 45% of the urban self-employed

• Regular Salaried workers are the most significant segment of the paid urban female workers

11

Informalisation of the Non-farm sector

INDIA• Proportion in the informal sector in 2005� Rural areas – 77%�Urban areas- 63.5%• Between 1999-2000 and 2004-05 informalisation

proceeded faster for males than for females• Informalisation most in self-employed work (97%)• Implication for women�in addition to women in the farm sector, majority of

women in non-farm sector without security of tenure and without any form of social security (example – maternity benefits)

12

China : Analysis of Women’s

Employment (1)• Women enjoyed long period of economic and financial

independence owing to the legacy of the communist era• Even after reforms, job opportunities available in non-farm sector

(TVE, urban labor units, SEZ)• Young women benefitted from the higher education boom – higher

financial rewards• At 71%, the proportion of women in paid employment is one of the

highest in the world.• Advantages to women eroding due to restructuring of the public

sector and opening up of the economy � Made women vulnerable to sudden changes and shocks� large scale labour retrenchment of 1997, more women than men

were made redundant or forced to retire early� Unemployment period also tended to be longer for women and the

probability of re-employment lower due to unequal access in part to social networks and re-employment

13

China (2)

• Retrenched women who fail to get reabsorbed by the formal sector and those unable to wait for the right job are turning to temporary, informal jobs, increasing informalisation of the economy.

• Others dropping out of the labour market, leading to the decline in the participation rate.

• Due to tight employment situation in cities and restrictions imposed by the hukou system, migrant women workers reported to be returning home in droves (Attane 2012).

• Because of the highly competitive nature of the job market, a marked preference for men has emerged: many job offers are reserved for men and women continue to hit the glass ceiling (ACWF 2011)

14

China (3)• Rural China

� In 1982, 77.1 per cent of women were engaged in agriculture; this declined to 75.3 per cent by 1990 and further to 69 per cent by 2000.

� since male participation declined faster, women’s share of agricultural labouractually increased from 46.8 per cent in 1982 to 48.5 per cent in 2000

� In 2010, 25 per cent of female labour and 37 per cent of male labour are engaged in off-farm work in rural China compared to 10.3 per cent and 19.1 per cent respectively in 2000

• Urban China

• From less than 1 per cent in the 1980’s women working as wage-earning migrants increased to 7 per cent of the female labour force by 2000 (Zhang, Rozelle et al 2006).

• young (16 to 28 years), better-educated and unmarried women who predominate both off-farm work and urban wage earning migrants.

• Migrant women are however less educated than their male counterparts.

• Between 2005 and 2010 although total number of jobs increased women’s share actually declined to 37.2, because major share of jobs created went to men.

• Thus during the decade from 2000-2010 women gained proportionately less jobs leading to the worsening of women’s position in the labour market vis-à-vis men.

15

China (4)

• Women’s presence in agriculture has been declining while their proportion in manufacturing and service sectors has been increasing, more rapidly in services compared to manufacture.

• Compared to men, women have a dominant presence in healthcare, sports and social welfare, constituting, in 2000

� 55 percent of the total labour force. • women have been unable to grab as many of new

opportunities as men, they have succeeded in entering a wide variety of economic activities

16

Earnings

17

Earnings- China�ratio of female to male earnings fell from 0.84 in 1987 to 0.67 in 2004. �In urban areas, migrants workers tend to get two thirds the wage of an urban registered worker, although half of them do get free accommodation.�Migrant workers also worked longer hours and got less social security benefits. In fact, during this period the earnings gaps increased more dramatically for lower deciles

18

Earnings - India

Year Rural Urban

Male Female Male Female

Regular

Salaried

2004-05 145 86 203 153

2009-10 165 103 260 213

Growth rate (%) 2.8 4.2 5.6 7.8

Casual

2004-05 55 35 75 44

2009-10 67 46 91 53

Growth rate (%) 4.5 6.2 4.2 4.1

�As per data for employment report of 2009-10, the difference in earnings was observed in public works, though not as stark as in private works.� Difference least for casual labour in MGNREG public works�Both male and female wages have risen between 2004-05 and 2009-10, female wages, both in rural and urban areas rising faster than male wages. However, the gender gap remains almost unchanged

19

Review

• There are laws aimed at maintaining equity in wages

�Statutory Minimum Act and Equal Remuneration Act in India

�Mandates in Chinese labour laws

• Yet gender differentiated wages a bitter fact of life for women in both countries

20

Social Security

21

Social security in India

India - Type and Coverage of Social Security, 2004-05 (percentage of estimated

employment in the age group of 15 +)

Male Female

Eligible for: only PF/ pension (i.e., GPF, CPF, PPF,

pension, etc.)

1.64 0.85

Eligible for only gratuity 0.14 0.08

Eligible only health care & maternity benefits 0.24 0.22

Eligible only PF/ pension and gratuity 0.47 0.2

Eligible only PF/ pension and health care & maternity

benefits

0.48 0.27

Eligible only gratuity and health care & maternity

benefits

0.24 0.13

Eligible PF/ pension, gratuity, health care & maternity

benefits

4.73 2.52

Not eligible for any of above social security benefits

(INFORMAL EMPLOYMENT)

92.1 95.7

•Social security is in the concurrent list�while the law is made at the centre, implementation is at the State level. •Enforcement very poor so that only a minute percentage of those covered are able to claim these benefits

22

Social Security - China

Table 2.13. China - Percentage of Formal and Informal Employed

Having Medical Insurance by Gender: 1997-2006

Formal Informal

Year Male Female Total Male Female Total

1997 70.93 67.55 69.4 19.1 25.75 22.32

2000 65.7 65.7 65.62 20.12 19.16 19.76

2004 71.02 65.78 68.75 19.92 16.96 18.67

2006 75.2 79.41 76.93 33.2 36.22 34.53

Source: Cook and NI (2009) based on China Health and Nutrition Surveys

�In the highly competitive environment of the reforms, private employers evade paying mandated women-specific social security payments - avoiding recruitment of women, not registering women employees, simply refusing to pay or firing women when they get pregnant�There is also a marked preference for young, unmarried women with low levels of education, particularly migrants, who are in general not very aware of their rights� Local governments are on their part, lax in enforcing the law (China LabourBulletin, 2004a).�But serious efforts are being made to introduce a broad-based social security system based on employer-employee contributing model to equally cover formal and informal workers.

23

Review

• India – social security benefits apply to formal workers of the organized sector namely to government and corporate sector employees

� making 95.7 % of the female employees NOT eligible for any of the social security benefits due to the informalisation of labourforce

• China� Similar problem of informalisation and privatization �with enforcement responsibility passed on to local authorities,

evasion of social security payments

• Efforts made in both countries to have a broad-based social security system covering formal and informal workers equally

24

Structures of governance and enabling

laws

25

The role of structures of

governance• In India the 73rd Amendment Act (1992) aimed at decentralizing the

political and economic management of development and also removing the gender imbalances and bias in the institutions of government.

• 50% reservation for women in PRIs.

• Have they been successful in distributing the economic power to women?

• Two significant econometric studies , have opposite findings one saying women as chair

� Esther Duflo’s (2004) randomized controlled trial study in West Bengal and Rajasthan has indicated that reservation affected policy choices in ways that seem to better reflect women’s preferences.

� Rajaraman (2012) through another randomized study in the states of Madhya Pradesh, Chhattisgarh, Rajasthan and Orissa rejects this proposition that women as heads make choices which benefit the needs of their own gender, by showing how local circumstances and not gender plays a major role in governing the decisions made by women heads.

26

Fiscal Devolution

• The fiscal system in India devolves less than 5 percent of the overall fiscal resources to local governments; and almost no functionaries; while community participation is advocated in most programs, full transfer of functions and funds to communities occurs rarely

• This is in sharp contrast to China where counties (local councils) have political and financial autonomy

27

Central

Govt

Provincial

Govt (31)Prefecture Govt

(333)County Govt

(2,859)Township Govt

(40,828)

623,669 Village

Committees

28

•Policies and programs designed at the central level.�based on piloting in different provinces.

•This makes policy making strictly evidence-based.

•Counties are in charge of implementation, with help from the prefectures and provinces.

•Townships are administrative subdivisions of the counties.

•Counties raise their own revenues And are autonomous.

•They have their own administrative and technical staff. Poor counties get financial support from central government and provinces

Decentralization in China

Lessons from IndiaSignificance of rights to land resources

• Women’s importance in agricultural production both as workers and as farm managers growing as more men move to non-farm jobs leading to an increased feminization of agriculture.

• agricultural productivity is increasingly dependent on the ability of women to function effectively as farmers.

• However ownership of land is concentrated mostly in male hands.

• Lack of entitlement to land (and other assets such as house, livestock, and so on) a severe impediment to efficiency in agriculture for women cultivators.

• In the absence of title women cannot get credit or be entitled to irrigation and other inputs, especially technology.

• In India the legal framework amended in favour of women in 2005 with the deletion of the gender discriminatory clause on agricultural land in the Hindu Succession Act

• Findings of a study by Deininger et al (2012)

� the Hindu Succession Act (HSSA) significantly increased women's likelihood to inherit land, although it did not fully compensate for the underlying gender inequality.

� a significant increase in girls educational attainment after the HSAA suggest that the Act led to genuine improvement in women's socio-economic status.

29

Lessons from India and China for each

OtherINDIA

• Enabling legal rights

�Inheritance laws

• Inclusive legal structures

�Reservation of seats at the local elected bodies

• Massive spread of support for infants and children

�ICDS

30

CHINA•Attention to agriculture

•Building food availability for all

•Conscious inclusion of women in the labour force

•Building opportunities of women in the rural non-farm sector

devakijain@gmail

www.devakijain.com

31