Wage Gap in Labor Market, Gender Bias and Socio-Cultural Influences: A Decomposition Analysis for India

This paper captures the payment gap by integrating labor market performance with that of family decision making practices. We conjecture that women from patriarchal families are earning less than men as they are likely to face more severe participation constraint. Women sacrificing their career growth for household duties are more likely to come from families with stronger patriarchal values. We use Mincer wage function incorporating patriarchy as one of the explanatory variables, which conforms the role of family culture. Then we use Oaxaca-Blinder methods of decomposing inequality in female-male hourly wage earning into the contributing factors like observed and unobserved. We see how much of the wage gap of male and female workers is explained by endowment effect and how much of it is due to coefficients and the interaction effect. We found that the patriarchy index plays statistically significant role in India for both blue collar industrial jobs and white collar service related occupations compared to the agricultural works. In fact, for the latter, both female and male are exposed to the clutch of patriarchy to a large extent which may be due to other related family culture and demands more attention in future research.