Do Economic Reforms InfluenceHome-Based Work? Evidence from India

Abstract

This paper analyzes the factors that influence the conditions under which a woman in India participates as a home-based worker using secondary level data at the micro level. At the macro level, the paper analyzes whether trade and industrial liberalization in India led to an increase in subcontracted work, of the home-based variety. The results show a historically high share of women in home-based work, which implies that female participation in such work was more likely to be determined by their cultural milieu than by the recent liberalization process. Further, while the micro model of social determinants appears to fit the female home-based work equation, the macro model is found to be insignificant. The lower but increasing share of male home-based work and the statistical significance of the macro model as a determinant of such work lead us to conclude that the economic reforms in India had a statistically significant impact on this form of production organization among men.

Keywords:

• Data-gathering techniques
• economic reform
• flexible labor
• gender inequality
• home-based workers
• labor process
• JEL Codes: J4, J7, J8

Notes

¹ The names of the authors are in alphabetical order.

² The relationships are argued to be exploitative as the wages paid are very low, sometimes half that of a regular wage, and they do not receive social security or any other benefits, such as sick leave, paid leave, medical insurance, old age pension, and provident funds. These workers are not well organized, which weakens their bargaining power. The wages paid to these workers are piece-rated and not on fixed time, which allows for further exploitation compared to those hired on a regular or casual basis.

³ There is a small probability that since the codes devised in the two surveys were different, the data were not perfectly comparable. However, given the lack of any other source of data on home-based workers for more than one time point, we analyze these estimates with caution.

⁴ Scheduled Castes (SC) are the former untouchable castes. They are economically the weakest and historically subjected to discrimination and deprivation. In addition to the caste system, India has been home to several tribes that have been similarly designated (Scheduled Tribes). The Other Backward Castes (OBC) are the erstwhile Sudra jatis, who were not targets of untouchability, but their social and economic position was close to that of dalits (Untouchable Castes). OBC are supposed to capture the jatis that have been described in the constitution as “socially and educationally backward classes” (Ashwini Deshpande 2005: 3). The use of the word “backward” is a hangover from the British period, when terms such as “backward classes” or “depressed classes” were used. There has been considerable debate, even during the British period, whether reservations (preferential treatment) should be extended to the OBC as they have not suffered the stigma of untouchability. In a number of states in British India, education benefits were given to OBC and in some of the major states, such as Madras, Bombay, and Mysore, preferential treatment was given to OBC that included reservations and welfare schemes (Ashwini Deshpande 2005: 11). The preferential treatment during the British period was extended to low castes as well as classes, indicating their low social and economic situation. Since independence, caste groups have been clustered in broad categories and identified in a government schedule as beneficiaries of affirmative action – Scheduled Castes (SC), Scheduled Tribes (ST), Other Backward Castes (OBC), and Others (Forward Castes) (Ashwini Deshpande 2007: 739).

⁵ The products under the “reserved list” are for the exclusive production of small-scale industries, and they get complete support for raw materials and subsidized finance from the government.