Home / News / India /  What drives companies to hire women

In India, female employment rates are persistently low despite improving female literacy. Many commentators blame cultural factors such as poor treatment of women at the workplace for this paradox. But a new World Bank study authored by Maitreyi Bordia Das and others, finds that location, firm characteristics and discriminatory hiring practices may play a bigger role in explaining India’s low female employment rates.

Based on a survey of 618 companies across Bhopal, Gwalior and Indore, the authors find certain types of firms such as micro-enterprises with more temporary workers are more likely to hire women.

They also find that the share of female employees is higher in the services sector, likely driven by female-owned businesses and traditionally ‘female’ trades such as beauty salons. The authors find that the vast majority of employers have socially acceptable attitudes about women’s work and education: they agree that women should be equally educated, work after marriage and be equally compensated for the same work.

However, attitudes vary about the relative role of women and men as breadwinners. For instance, 53% of employers in the survey agreed that, when jobs are scarce, men should have more right to work than women.

The authors argue that while these biases and prejudices of individual employers may not affect the chances of women’s employment directly, they can reinforce the prevailing norms of occupational sex segregation. For instance, very few firms studied under the survey offered maternity leave or childcare facilities. Employers also distinguished between male and female candidates by judging women on parameters such as their willingness to work long hours—which they did not consider important for men.The authors conclude that both culture and firm characteristics can reinforce each other in a complex way.

Because of this, the authors suggest that policymakers address firm characteristics to tackle India’s low female employment instead of simply waiting for culture and attitudes to change.

Also Read: Does Culture Matter or Firm? Demand for Female Labour in Three Indian Cities

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