metadata: authors: 0: author: Das,Maitreyi B
1: author: Mehta,Soumya Kapoor
2: author: Zumbyte,Ieva
3: author: Sasmal,Sanjeev
4: author: Goyal,Sangeeta
count: India
docna: 0: docna: Does Culture Matter or Firm ? Demand for
            Female Labor in Three Indian Cities
docty: Policy Research Working Paper
subtopic: Labor Markets,Gender and Development,Pulp & Paper Industry,Plastics & Rubber Industry,Textiles, Apparel & Leather Industry,Food & Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Rural Labor Markets
teratopic: Social Protections and Labor,Gender,Macroeconomics and Economic Growth,Industry,Rural Development
abstracts: cdata!: In discussing the inordinately low
            employment of Indian women in urban areas, several studies
            have argued that culture and attitudes have created a labor
            market that is inherently discriminatory. The unsaid
            corollary is that culture is slow and hard to change and so,
            women will stay out of the labor market until social change
            occurs. The empirical evidence on the role of culture is
            slim at best. This paper fills the void in the policy
            literature, as it assesses the relative role of culture, as
            signified by attitudes of employers, and firm
            characteristics in hiring women. The paper is based on a
            unique survey of 618 firms in three of the largest cities in
            the state of Madhya Pradesh (India)—Bhopal, Indore, and
            Gwalior. Using detailed descriptive, bivariate and
            multivariate analysis at the firm level, the hiring process,
            and attitudes toward male and female workers, the paper
            addresses the issue of culture and firm characteristics,
            while noting that the two are not necessarily in binary
            opposition. The results reinforce the conventional wisdom in
            some ways and are surprising in others. The most salient
            result is that employer attitudes matter much less for the
            chance that women will be hired, than do firm and location
            characteristics. This has significant policy implications,
            the most important of which is that female employment in
            urban India is amenable to policy intervention, and that it
            is not necessary to wait for culture to change.
geo_reg_key: 517198,517191,517212
repnme: repnme: Does Culture Matter or Firm ? Demand for
            Female Labor in Three Indian Cities
display_title: Does Culture Matter or Firm Demand
            for Female Labor in Three Indian Cities
listing_relative_url: /research/2019/02/30827879/culture-matter-or-firm-demand-female-labor-three-indian-cities
topicv3: Education, Skills Development and Labor
            Market m1326135 1484,Labor Markets m1326488 855,Manufacturing Sectors m1326521 1281,Gender m1327621 615,Jobs m1503931 2670
publishtoextweb_dt: 2019-02-12T00:00:00Z
historic_topic: Social Protections and Labor,Gender,Macroeconomics and Economic Growth,Industry,Rural Development
no_of_pages: 28
author_keys: 0: author_key: 539763
1: author_key: 1201462
2: author_key: 168173
model_extractions: Policy Research Working Paper 8736 Does Culture Matter or Firm? Demand for Female Labor in Three Indian Cities _Maitreyi Bordia Das Soumya Kapoor Mehta Ieva Žumbytė Sanjeev Sasmal Sangeeta Goyal_ Social, Urban, Rural and Resilience Global Practice February 2019
Policy Research Working Paper 8736

# **Abstract**

In discussing the inordinately low employment of Indian women in urban areas, several studies have argued that culture and attitudes have created a labor market that is inherently discriminatory. The unsaid corollary is that culture is slow and hard to change and so, women will stay out of the labor market until social change occurs. The empirical evidence on the role of culture is slim at best. This paper fills the void in the policy literature, as it assesses the relative role of culture, as signified by attitudes of employers, and firm characteristics in hiring women. The paper is based on a unique survey of 618 firms in three of the largest cities in the state of Madhya Pradesh (India)—Bhopal, Indore, and Gwalior. Using detailed descriptive, bivariate and multivariate analysis at the firm level, the hiring process, and attitudes toward male and female workers, the paper addresses the issue of culture and firm characteristics, while noting that the two are not necessarily in binary opposition. The results reinforce the conventional wisdom in some ways and are surprising in others. The most salient result is that employer attitudes matter much less for the chance that women will be hired, than do firm and location characteristics. This has significant policy implications, the most important of which is that female employment in urban India is amenable to policy intervention, and that it is not necessary to wait for culture to change.

This paper is a product of the Social, Urban, Rural and Resilience Global Practice. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/research. The authors may be contacted at mdas@worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
# **Does Culture Matter or Firm? Demand for Female Labor in Three Indian Cities**<sup>**1**</sup>

Maitreyi Bordia Das (mdas@worldbank.org)<sup>2</sup> Soumya Kapoor Mehta (soumyakapoor@gmail.com), Ieva Žumbytė (ieva_zumbyte@brown.edu), Sanjeev Sasmal (sanjeev.sasmal@sutraconsulting.com) and Sangeeta Goyal (sgoyal2@worldbank.org)

**JEL classification: Employment; Discrimination; Gender; Firm; Economic Sociology**

## **Keywords: Female employment; employer attitudes; India; culture; labor markets**

> 1 The authors are grateful to Yoonyoung Cho and Sona Thakur for comments.

> 2 Corresponding author
# **1. Introduction**

India’s low female labor force participation, especially in urban areas, is now extensively documented. There has been a swathe of studies over the last decade, especially since the National Sample Survey’s (NSS) 68th Round established a decline in women’s employment over the period 2004-05 and 2011-12. Some have called this a ‘conundrum’ (Das and Zumbyte, 2017: 2), asking why women should opt out of the labor market, despite being better educated in recent years and during a period when India had registered high levels of growth that would indicate better job opportunities. Increased urbanization itself is associated with better job opportunities across the board, and one would expect younger women to benefit from market work more than their mothers’ generation had, at least in cities and towns. But in fact, women’s employment in cities and towns in India has never crossed the 25 percent mark, as Das and Zumbyte (2017) point out, and urban women’s labor force participation has historically been much lower than that of their rural counterparts.

The large number of studies conducted since 2010 have focused almost entirely on the supply of female labor. The onus by implication, is on female workers and their families, who decide whether women should stay home or go into paid work. Some of the research has highlighted the role of the demand side in exerting an influence on women’s employment (Chatterjee, Murgai and Rama, 2015:8). Smaller studies and qualitative work have alluded to active discrimination against women in hiring and if hired, of their poor treatment in the workplace (Kumari, 2014; Tripathi and Yadav, undated). Still others have argued that in fact, the demand and supply of female labor may be mutually reinforcing (Das and Desai, 2003; Das, 2006). However, in the absence of large-scale surveys that can capture the demand for female labor, it is difficult understand what may be happening to such demand.

This paper is based on a unique survey of 618 firms, carried out in 2015, in three of the largest cities in the state of Madhya Pradesh (India) – Bhopal, Indore and Gwalior. Each of the cities has a long history - Bhopal is the state capital; Gwalior has traditionally been the hub of educational institutions; and Indore has a large array of small and large industries. Madhya Pradesh (MP) itself is emblematic of India’s Hindispeaking heartland and can be seen, in many ways, as representing north-Indian culture and norms. The paper fills a void in the policy literature, as it assesses the relative role of culture, as signified by attitudes of employers, and of firm characteristics, in hiring women. It is part of the World Bank’s dialogue with the Government of MP in higher education and the extent to which educational attainment leads to more jobs for women.

# **2. What do we know about jobs and women’s employment in Madhya Pradesh?**

As pointed out earlier, MP is a good representation of north India in many ways. Figure 1 shows that the labor force participation for urban women in MP is a little above 15 percent and fairly close to the urban Indian average of 19 percent. Most employed women in the cities and towns in MP work either in regular jobs or in non-farm self2
employment (figure 2). It is also worth noting that jobs have grown relatively slowly in MP; according to World Bank estimates, while the size of the working age population in the state (not in school) grew by about 6.6 million people between 2005 and 2012, the number of workers expanded by only 0.7 million over the same period, suggesting that not enough jobs were available for everyone of working age. Women were more adversely affected: about 2.2 million female workers dropped out of the workforce, even as 2.9 million men joined, resulting in an aggregate expansion in the number of workers by 0.7 million, a trend that we witness in other low-income states and in India as a whole.<sup>1</sup>

**Figure 1: Female labor force participation rates in urban MP is close to the Indian average**

<!-- Start of picture text --> Urban Female Labor Force Participation: 2011<br>45% 39.1%<br>40%<br>35%<br>30%<br>25% 19.3%<br>20% 15.2%<br>15%<br>10% 5.9%<br>5%<br>0%<br>Source : NSS, 2011-12<br>Figure 2: Employed urban women tend to be in regular jobs or be non-farm self-<br>employment<br>90 Urban employment, 2011‐12 85.5<br>80<br>70<br>60<br>50<br>40<br>30.5<br>27.5<br>30 23.7<br>20 13.1<br>10 5.9 5.6 1.1 5.1 1.9<br>0<br>Regular N‐F Self‐empl F Self‐empl Casual Out of LF &<br>unempl<br>female male<br>Bihar Jharkhand Uttar Pradesh Assam Haryana Uttaranchal Punjab Rajasthan Delhi Madhya Pradesh Jammu & Kashmir D & N Haveli Gujarat Chandigarh West Bengal Lakshadweep Odisha All India Arunachal Pradesh Pondicherry Maharastra Nagaland Manipur Karnataka Andhra Pradesh Goa, Daman & Diu Tamil Nadu Himachal Pradesh Kerala Meghalaya Chattisgarh A & N Islands Tripura Mizoram Sikkim<br>Percent<br><!-- End of picture text --> _Source:_ NSS, 2011-12 3
As national-level analysis has pointed out (World Bank, 2011), in MP too, women aspire to market work. When asked whether they would be willing to do paid work outside their homes, about 38 percent of working age women in urban MP sampled for the NSS (68th round) responded ‘yes’. Aspirations were higher among younger women: almost half the women under the age of 30 said they would like to work outside the home, with their aspirations for work having risen over time. Given the fact that about 20 percent of women in MP complete high school, and that half of all young women want to work outside the home, there is clearly a disjunct between women’s aspirations, their skills and their reality (World Bank, 2012).

<mark>The rest of the paper is organized as follows. The next section presents a short review of the literature on how attitudes held by employers about women may shape the latter’s options for work. Section 4 describes the data collected from employers in MP, the sampling strategy, the survey instrument used and the challenges in measuring norms and attitudes. Section 5 provides a brief profile of the enterprises in the sample. Section 6 describes the hiring process used by firms, employer attitudes towards hiring women, and whether these differ by the gender of the respondent. Section 7 presents the multivariate results and Section 8 concludes.</mark>

# **3. Attitudes and discrimination in the labor market**

There is a rich body of empirical literature on bias in hiring, which encompasses both implicit and explicit bias along lines of gender, race, ethnicity, place of residence, among others. certain - Evidence on discrimination along the lines of gender in the labor market shows that gender biases affect both the demand and supply of female labor. The case of women in science, technology, engineering and mathematics (STEM) is salient, as women are hugely underrepresented even in countries where larger proportions of them acquire STEM skills. A recent study in the US shows that women are considered intellectually inferior for jobs in science and technology and are therefore less likely to be referred than men for work that requires ‘brilliance’, ‘superior reasoning skills’ and ‘natural intelligence’ (Bian, Leslie and Cimpian, 2018).

What underlies discriminatory attitudes against women in the labor market? At the heart are often social norms that dictate the ‘place’ of women versus that of men. The former is widely perceived as having primary responsibility of the home and children with low ‘attachment to the labor market’. Even within the labor market, women are concentrated in traditionally ‘female’ occupations, those that are usually extensions of their role at home (e.g. teaching, cooking or nursing). Employers may prefer to hire women in quintessentially ‘female’ jobs – such as in office jobs or those that require more ‘feminine skills’ (i.e.: jobs that require social conversation like customer support or call center jobs). Jobs involving authority, technical knowledge and physical strength, on the other hand, are considered more appropriate for men, resulting in occupational sex segregation. Data on large US law firms in the mid-1990s indicate that when selection criteria include a greater number of stereotypically masculine characteristics, women constitute a smaller proportion of new hires (Gorman, 2005).

The distinction between the demand and supply of female labor is often obfuscated and this is reflected in the fact that the norms of each side often intersect. Take for instance 4
the widespread desire of Indian (and other) employers to be the ‘protectors’ of female employees. Examples of such protection in the workplace may include not giving women responsibility for tasks that necessitate their engagement with unknown men, or male employers considering themselves guardian figures responsible for women’s safety and in the process, exercising control, and inter alia, curtailing the latter’s movements. World Bank (2018) details legal provisions that expressly deny women the opportunity to participate on equal footing as men, and many of such laws are intended to uphold the culture of a particular society. So, the supply of female labor rests on several factors that have to do with the woman’s characteristics such as age, and human capital endowments, her family and her community. But the demand side does not reflect a blind or perfect market either. It is influenced by the same norms and attitudes about female workers as the rest of society. In fact, the labor market internalizes familial gender norms and may in fact, help in solidifying them by the way in which it conducts its hiring and how it treats its workers.

Attitudes towards female workers may vary by the workers’ place in the life cycle. In its 2016 survey, Robert Walters, one of the world’s leading specialist recruitment consultancies, finds that nearly half of hiring managers in select East and South-East Asian countries did not employ any woman returning after a career break (taken likely because of marriage/pregnancy) in the year prior to the survey. Unequal salaries were identified as the most common type of discrimination facing 48 percent of returning women in the region, followed by lack of career advancement opportunities (38 percent) (Robert Walters, 2017). Similarly, a survey conducted on behalf of the Equality and Human Rights Commission (EHRC) finds that employers in the UK are hesitant when it comes to recruiting pregnant women and young mothers. Sixty percent of the 1,106 employers interviewed for the survey said that a woman should disclose a pregnancy during the recruiting process; 46 percent thought it was reasonable to ask women if they have young children; and a third agreed it was reasonable to ask women about their plans to have children in the future, during recruitment.<sup>2</sup> In India too, married women with children may be seen as having low commitment to the labor market. Newly married women may not be given certain responsibilities in the implicit ‘fear’ that they may get pregnant. Using anecdotal evidence, Johari (2014) notes how Indian employers prefer to hire women without care duties. On their part, female workers with children or other care responsibilities are under considerable pressure to show that they are both good wives and mothers as well as good workers. They also need to live up to societal notions of propriety in their behavior and dress, especially outside the home. Younger, unmarried women too face tremendous obstacles, especially in cultures where female seclusion and older notions of modesty prevail. In India for example, families exert tight control over women’s mobility, including deciding whether a job is safe or appropriate. Marriage, and the social pressure to protect young women’s ‘virtue’, trumps the prospect of getting a good job.

While the empirical evidence on attitudes towards women workers in India is evolving, several studies show the pervasiveness of such discrimination. In a phone survey of 3,360 respondents across three states and one city in India, Coffey et al (2018) asked men and women whether married women should work outside the home, if their husbands earn a good living. There was little variation across the sample in disapproval for married women’s work: in most places, about half of the adults interviewed disapproved, with no significant differences between men’s disapproval and women’s 5
disapproval. Interestingly, the disapproval for married women’s work was higher than the levels recorded in response to a similar question in the American General Social Survey nearly 45 years ago. Using content analysis of stereotyping in job advertisements in India for instance, Anand (2013) finds widespread use of gender specific terms for jobs such as that of a receptionist, a telecaller, data entry operator and a teacher. Terms range from the benign ‘Receptionist only – Female’ to comments regarding age and physical attributes: ‘beautiful and broad minded (F) office assistant and personal secretary’, ‘up to 25’ and so on. Conversely, sales and field jobs are earmarked as a ‘boys-only’ section, with keywords like ‘field boys’ and ‘sales boys’. Khandelwal (2002) similarly finds that male managers are stereotyped into working in production and sales whereas women work in ‘soft fields’ like Human Resources and Public Relations.

In a more recent analysis of 800,000 job recruitment advertisements sourced from an online job portal in India, Chowdhury et al (2018) find that it is common to mention the preferred gender in job advertisements. Further, these advertisements tend to favor men over women. Although advertisements for professional occupations exhibit less explicit gender bias, they too are not completely gender neutral. In all professional jobs, those advertisements that target men specify/offer a higher salary.

Gender stereotyping and pervasive bias in attitudes during recruitment is something of a self-fulfilling prophesy. Once women view the labor market as being discriminatory, or ‘feel’ that they would not be selected for a job, they may abandon the search. Discriminatory or non-transparent hiring practices send misleading signals to women about the kind of jobs they are suitable for, in turn dampening their aspirations. Women construct their identities through the lens of these gender stereotypes and willingly accept their disadvantaged place in the workforce (Ridgeway, 1997). In a review undertaken for the World Bank to unpack gender constraints and opportunities in India’s Micro, Small and Medium Enterprise (MSME) sector, the International Centre for Research on Women (ICRW) finds that vendors who deal with self-employment ventures prefer to interact with men. Women on their part are aware of such biases and themselves hesitate to engage in market spaces traditionally associated with men (ICRW 2014). With few opportunities to gain successful entry into well-paying jobs or gain skills for upward mobility, women end up internalizing stereotypes about themselves, leading to a ‘discouraged worker effect’ (Das 2006).

# **4. Data and methods**

This paper seeks to answer the question – what is the role of firm characteristics and attitudes of hiring managers in gender outcomes in hiring? It uses data from a unique survey of firms in three cities of MP – Bhopal, Indore and Gwalior. The survey contains questions on the characteristics of firms, gender and skill profiles of workers and attitudes of hiring managers (who are often the owners) about female employees and what they expect of them.

**Sample selection:** The sample of enterprises was selected from a manual listing of all enterprises registered with the Directorate of Industries (DIC) in the three cities. Since the data set was large enough, only enterprises registered in the five years prior to the survey i.e. between 2010 and 2015 – were considered. Separate lists were created for

6
manufacturing and service sector enterprises, and these were divided further according to business size: registered industrial units (large), medium enterprises, small enterprises and Micro Small Medium Enterprises (MSMEs).<sup>3</sup> A probability proportional to size (PPS) method was used to obtain a proportionately distributed sample of enterprises (200 each from the three cities). Within each city, the PPS method was used to define the proportion of enterprises to be interviewed by size and sector. Since there were only 20 large units in the universe, a decision was taken to interview them all; in addition to the 600 enterprises randomly sampled. An attempt was made to cover all listed product and service categories (again, in proportion to their share in the population). Several firms drawn from the original sample frame had to be replaced with others either because they had shut down or moved addresses. Two of the 20 large enterprises refused to give an interview, bringing the count of firms who were eventually surveyed to 618.

**Survey instrument:** The questionnaire was designed to collect information about the nature of the enterprise e.g. years in operation, sector, size, employee strength, proportion of permanent and temporary employees, number of male and female employees, benefits offered to employees and geography of sales i.e. whether the firm’s production or services are localized and cater to their immediate neighborhood, or the whole city, other towns or cities in MP, India or outside India. In addition, firms were probed about their hiring practices, the number of new employees recruited in the past three years, proportion of men and women among new hires, how they advertise vacancies, the hiring process, and parameters they consider while hiring candidates for different functional areas, especially when hiring female candidates.

The added richness of this data set comes from the fact that employers were asked about their attitudes to gender norms. Two questions – whether girls and boys should receive equal education and whether women should work after they are married - follow from tradition in South Asia (like elsewhere) where families historically tended not to educate daughters as highly as they did their sons and where there are strong beliefs that a woman’s place is in the home. We also analyze results from four additional questions in the survey that relate directly to the labor market. They follow questions in global surveys and ask if, when jobs are scarce, men should have more right to jobs; if men and women deserve the same wages and benefits if they do the same jobs and if men make better employees than women do. Finally, to get at attitudes regarding attitudes towards occupational sex segregation, we asked if certain jobs are better suited to men or to women.

While it does not detract from the richness of our data set, we are acutely conscious of the fact that norms and attitudes are notoriously tricky to measure. First, responses to questions on attitudes are inexorably ascribed by context – who the respondent is, where they live, how they were raised, among others (see for instance Grand, Bernier and Strohmer, 1982). These can affect both the respondents’ interpretation of the question as well as their response. According to Zaller (1992), ‘individuals do not typically possess ‘true attitudes’...rather, they construct ‘opinion statements’ on the fly...based on whatever considerations are momentarily salient’ (Zaller, 1992). This also means that a change in question order or wording may result in different responses. Second, the more specific an attitude measure, the more likely it will be related to actual behavior (Ajzen, 1988). There are several scales that measure employer attitudes to hiring persons with disabilities, for instance. But the responses to these vary by the 7
specific disability being considered. Most employers for example, are likely to consider persons who are blind or visually impaired more difficult to hire compared to persons with other disabilities (Gilbride, Stensrud, Ehlers, Evans and Peterson, 2000).

Third, the validity of employer responses may be affected by what may be termed a ‘socially desirable response’ bias i.e. what may be a socially appropriate thing to say (Fischer and Fick, 1993; Crandall, Eshleman and O’Brien, 2002). Fourth, the Likert type scales used to measure attitudes record respondent agreement or disagreement for a series of statements. But such questions tend to be carefully considered by adults, who usually select a response which represents more or less a ‘middle ground’ i.e. neither agree nor disagree to a statement. This is done because adults indicate espoused views, rather than their overt views. Fifth, responses to attitude questions may vary by whether the survey is self-administered or administered by an interviewer. In the case of the latter, factors such as interviewer characteristics, their behavior, how the survey is introduced etc. may also make a difference to responses. Finally, an attitude is essentially a subjective phenomenon: any attempt to define it, the construction of an abstract, a conceptual world on how respondents ‘may’ react to a situation, or a person or object. This may be different from how they actually react. In other words, respondent attitudes as derived from their responses may only be measures of hypothetical constructs, not valid measures of their real feelings, thought processes or actions.

**Methods** :  The survey gives us a unique insight into such demand-side factors as hiring processes, role of networks and gendered attitudes that impinge upon hiring decisions. To our knowledge, such attitudes have not been documented previously on a similar scale in India. Therefore, we report detailed results from the univariate and bivariate analysis.  Our multivariate analysis estimates the odds of a firm having at least one female employee, using a logistic regression model.  We are interested in two types of explanatory variables – first, those that highlight the characteristics of the firm and second, those that highlight the attitudes of the employer.  In terms of firm characteristics, we consider size, age, sector, city, share of temporary employees and geography of sales. We expect firm characteristics to have a strong influence on the hiring of females.  For instance, in keeping with the nature of occupational sex segregation, we expect firms that engage in machinery, production and sales to be less likely to hire women.  To our standardized specification, we add the attitudinal variables, first one by one, and then all together. We expect attitudes to matter for the likelihood of having a female employee and controlling for attitudes to alter the effects of firm characteristics, although we are agnostic in our expectation of the direction of effects.  In our multivariate analysis, we drop firms headed by women and firms for which data on the geography or area of sales were missing.  This brings our sample size down to 555 firms for the multivariate analysis.

# **5. Description of the sample and profile of enterprises**

Most of the enterprises in our sample operated at a very small scale: 86 percent were run as sole proprietorships, 9 percent as private limited companies,<sup>4</sup> and 4 percent as partnerships. Only two of the 618 enterprises were registered as public limited companies,<sup>5</sup> another two operated as cooperatives, and one reported itself as an NGO. Nearly all enterprises (98 percent), whether in manufacturing or services, catered to 8
their local area. The majority of firms hired fewer than 10 workers, although large manufacturing enterprises had greater variation in number of employees (see figure 3).

**Figure 3. Cumulative distribution of enterprise workforce: by size and sector**

<!-- Start of picture text --> 100<br>90<br>80<br>70<br>60<br>50<br>40<br>30<br>20<br>10<br>0<br>0 50 100 150 200 250 300 350 400 450 500<br>Total number of employees<br>Cumulative distribution, %<br><!-- End of picture text --> <!-- Start of picture text --> Micro/Small-manuf Large-manuf Micro/Small-services<br>Note: excluding medium enterprises (there are only 4 in manufacturing and 1 in services); n= 614<br>enterprises.<br><!-- End of picture text --> Manufacturing dominated our sample in terms of share of jobs, with almost three out of every four jobs being concentrated in the sector. Among micro, small and medium enterprises (MSME), 65 percent of the jobs were in the manufacturing sector (figure 4). Among start-ups or firms that had been in operation for less than 5 years at the time of the survey,<sup>6</sup> the service sector contributed to a higher share in employment (figure 5).

**Figure 4. Share of employment (%): by sector and size of enterprise**

<!-- Start of picture text --> Registered MSMEs 65.2 34.8<br>All enterprises 72.4 27.6<br>Manufacturing Services<br><!-- End of picture text --> Note: n = 6601 employees who were holding jobs in our sampled firms at the time of the survey

**Figure 5. Share of employment (%): by sector and age of enterprise**

9
<!-- Start of picture text --> 16.7<br>27.4 27.6<br>63.7<br>83.3<br>72.6 72.4<br>36.3<br>Less than 5 years 5-10 years More than 10 years All enterprise<br>Age of firm<br>Manufacturing Services<br><!-- End of picture text --> Note: n = 6601 employees Women comprised 16 percent of the total workforce in the sample. While in terms of absolute numbers, more women were found to be working in manufacturing firms (given the larger scale of operation of such units), as a proportion, service sector enterprises had a slightly higher share of women in their workforce (18 percent compared with 15 percent in the manufacturing sector) (figure 6). This is likely driven by female-owned firms, which are often in the service sector, are usually very small and conduct business on traditionally ‘female’ trades, such as tailoring, beauty salons, among others, and so are more likely to hire women.<sup>7</sup> They require skills that typically women possess. Later in the paper, we see that once we remove female heads of enterprises from our sample, the service sector has a much smaller likelihood of employing a woman. Smaller, micro units across manufacturing and services had a higher share of women, at around 20-21 percent, as compared to large enterprises, which reported only 10 percent of female workers in their midst (figure 7). Women’s share in employment also appeared to be higher in newer firms (0-5 years old), which had on average 24 percent of women in their workforce, compared to 12 percent in older firms, with the difference being statistically significant.

**Figure 6. Share of women employees: by sector**

<!-- Start of picture text --> By sector (in %)<br>100%<br>90% 14.6 17.9<br>80%<br>70%<br>60%<br>50%<br>40% 85.4 82.1<br>30%<br>20%<br>10%<br>0%<br>Manufacturing Services<br>Men Women<br><!-- End of picture text --> 10
Note: n = 1024 female employees; the total number of female employees across enterprises is 698 in manufacturing and 326 in services. Includes firms with female owners, who are also counted as workers.

**Figure 7. Share of women employees: by enterprise size**

<!-- Start of picture text --> By size (in %)<br>100%<br>12.1 8.9 10.2<br>90% 20.6<br>80%<br>70%<br>60%<br>50%<br>87.9 91.1 89.8<br>40% 79.4<br>30%<br>20%<br>10%<br>0%<br>Micro Small Medium Large<br>Men Women<br><!-- End of picture text --> Note: n = 1024 female employees; includes firms with female owners, who are also counted as workers In terms of industry type, there were larger shares of women in industries which traditionally employ women (e.g. manufacturing of food products, apparel) or in services that involve a client interface (e.g. tutoring centers, beauty salons, tailoring units and photo studios) (table 1). Women were largely absent in firms that manufactured furniture; motor vehicles and trailers; radio, television and communication equipment and apparatus; and real estate activities, indicating clear occupational sex segregation. This is in line with global findings on the sectors where women usually work. The World Bank’s annual World Development Report for 2019 finds that women have a relatively higher presence in both clerical support and services and sales occupations (44 percent). Their lowest presence is recorded as plant and machine operators and assemblers, where women fill just 16 percent of such positions (World Bank 2019).

**Table 1. Share of women employees: by industry type**

|**Industry**|**% of total**<br>**women in**<br>**employment**|
|---|---|
|Office, accounting and computing machinery|2.0|
|Health and social work|2.8|
|Retail trade; except of motor vehicles and motorcycles; repair of personal and<br>household goods|3.8|
|Manufacture of chemicals and chemical products|4.4|
|Textiles|4.7|
|Wearing apparel: dressing and dyeing of fur|6.7|
|Other business activities|6.9|
|Rubber and plastic products|7.7|
|Wholesale trade and commission trade, except of motor vehicles and motorcycles|8.0|

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|Machinery and equipment|8.4|
|---|---|
|Other service activities (tuition centers, beauty parlors, tailoring units etc.)|8.6|
|Food products and beverages|24.7|

Note: n = 618 enterprises; includes firms with female owners, who are also counted as workers Most of the sampled enterprises (mostly micro and small) employed a near equal number of permanent and temporary workers.<sup>8</sup> The large firms in our sample employed a higher number of permanent employees, but such firms were few in number, indicating that about half of the jobs offered by the average enterprise in urban MP had no measure of stability associated with them. Further, a little over one-fourth, or 27.4 percent, of all enterprises offered some benefits in addition to salaries, with bonuses, incentives and/or food being most common. Medium and large enterprises, expectedly, were more likely to provide benefits in addition to remuneration, than were micro and small firms, with more firms in Indore confirming that they offered such benefits. While benefits given by micro and small enterprises usually took the form of a bonus or incentive and/or food, medium-scale enterprises reportedly also offered accident/health insurance, medical compensation over and above a bonus and food. The larger enterprises in the sample offered Provident Fund (PF),<sup>9</sup> medical benefits,<sup>10</sup> and gratuity<sup>11</sup> in addition to these benefits.

Leave and other benefits are often considered to be measures of the rigidity or flexibility of a labor market. In our sample, only 17 percent of enterprises had any leave policy. Manufacturing enterprises were more likely to have such a policy, as were medium and large-scale enterprises. About half of the enterprises that had a leave policy provided 1- 2 days of paid leave per month. The rest offered unpaid leave. Further, very few enterprises (less than 7 percent) offered maternity leave. Among those that did, the leave offered was for 3 months or less. Only two in every five firms offering maternity leave, paid salaries during the period of the leave and were mostly large manufacturing enterprises.<sup>12</sup> Less than 2 percent of the service sector enterprises in our sample offered maternity leave. Finally, childcare facilities were even less common than leave in our sample; among the 169 enterprises that provided other benefits in addition to remuneration, only 7 offered any provision for childcare facilities.

# **6. Hiring processes and employer attitudes**

**The hiring process:  What do employers look for? Where do they look?** The survey asked employers how they assigned their employees to different functional areas and asked in particular, what they looked for in female candidates.  Overall, employers gave greatest weight to candidates’ work experience, especially for domains such as production, operations and other technical fields. Job-specific skills mattered as well. For instance, for human resources and administration, most enterprises valued academic performance in candidates. In finance and accounts, in addition to these characteristics, skills in information technology (IT) and computer proficiency were considered very relevant, as they were naturally, for jobs in IT support/computer and data processing. Finally, for jobs in business development, marketing and sales customer care, employers valued communication and presentation skills in English. Having ‘a right work attitude’ also seemed to be a very important factor in hiring for customer service and care positions.

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Overall, there was little difference in the characteristics employers look for in all candidates/employees and in female candidates/employees, but this varied considerably by occupation and once we disaggregated preferred attributes along a scale of highest to lowest. In assessing female candidates, employers ranked years of experience highest, followed by job related skills and right work attitude. The same factors featured across firms when asked about the second most important parameter in hiring females. But as the third most important parameter, many firms (particularly larger, manufacturing firms), rated women’s willingness to work for long hours as being critical – a factor that was not considered as important when hiring all employees.

Since most firms in our sample were very small, where did employers find potential employees? In keeping with the anecdotal evidence, employers in our sample seemed to hire based on word of mouth and on personal recommendations. Less than 5 percent of all employers said they advertised their vacancies - whether through newspapers, job portals or their own websites. Only the large firms participated in college job fairs and campus recruitment drives. The rest (95 percent), mostly micro and small firms, relied on candidates directly approaching them or through personal recommendations. Very few firms used employment exchanges. When probed about the average number of job applications received in a month, overall employers said they received more applications for temporary jobs than regular ones, perhaps because the former were more frequently advertised through personal networks, with large enterprises receiving on average 7-8 applications per month for temporary jobs, compared to about 1-2 applications in micro, small and medium size enterprises.

The importance of social networks in hiring is in keeping with Desai and Noon’s (2008) finding that employers in India rely on personal connections to fill job vacancies. In fact, with rapid growth in the number of men and women with at least secondary education in India, social contacts and cultural capital have come to play an increasingly important role in a labor market that is dominated by a surplus of candidates, with similar skills, who are competing for the same positions. Desai and Noon (2008) conclude that social capital – both in terms of diversity and strength of ties – is an increasingly important resource for securing scarce formal sector employment in India. Women are less likely to have the social networks that can get them such jobs, unless aided by families and friends. It is also not culturally appropriate for women to walk into firms asking for jobs or to market their skills or resumes aggressively.

**Attitudes of hiring managers:** Overall, and as we would expect, employers in our survey held generally positive attitudes to women’s education and work. Almost across the board, that is, 96 percent of respondents, agreed that girls should be as educated as boys and 85 percent agreed that women should work after marriage. Furthermore, 90 percent of employers said that men and women deserved equal wages and benefits for the same job (with the share of those agreeing to be slightly higher in the more dynamic job market of Indore). There was little variation in these responses by firm sector or size. These three questions are most ‘benign’ and generic, and few employers would disagree.  Over time, as gender differential in educational attainment has narrowed, the fact of girls being as educated as their brothers has taken root even in rural areas. Similarly, equal benefits for equal work is a value enshrined in the Indian Constitution and whether it influences how employers behave is unclear but overall, it is a value that few would disagree with.  The value of women working after marriage is slightly more liberal, and while an overwhelming majority in our sample were in support, it is unclear

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how the employers were interpreting the question. Since broad attitudes about education are not directly related to how employers actually behave, it is likely that some of the egalitarian responses were the socially desirable ones. We may have received different responses if we had asked whether the employers would allow their own wives, daughters or female wards to work after marriage, for instance.

The three questions that may reflect prevailing gender norms in the labor market more directly were, whether men have more right to jobs in times of job scarcity, whether men make better employees than women do and whether some jobs are better suited to men or to women. We saw greater variation in responses to these questions. A little over half the employers (53 percent) agreed that men should have more right to a job than women, when jobs are scarce, while another 34 percent did not answer the question. So, only about 13 percent actively disagreed that men have pre-eminence in rights to jobs, with little variation in the share of respondents who disagreed by firm size, sector or city. This is in keeping with findings from global surveys. In 2012, when asked a similar question about who has more right to a job, for the World Values Survey, nearly 52 percent of the respondents interviewed in India agreed, while 25 percent either refrained from giving an opinion or said they did not know. Another survey conducted by Pew Research finds that 84 percent of Indians agree with the statement, ‘when jobs are scarce, men should have more right to a job than women’.<sup>13</sup> Further, over two-fifths of the respondents believe that men make better employees and another 30 percent did not answer the question; only about 28 percent believe that men and women are equally capable in the labor market.

Employers in our sample were even less egalitarian when it came to attitudes about the kind of work women can or cannot do. Most employers interviewed for the survey considered men as being better suited for jobs in most functional areas, except in customer services and care. In general, employers perceived men to be better suited for jobs in production/technical/operational domains (82 percent said so); while in jobs involving procurement/purchase, 71 percent agreed that men were better suited. For jobs in business development, marketing, sales and HR, 62 percent of the respondents and for jobs in in IT support 57 percent agreed that men were better suited (table 2). In contrast, they were ambivalent to hiring men or women for finance and accounts jobs, and preferred women for jobs involving customer interface or customer care: 62 percent of respondents believed women to be better suited for customer service in comparison to men.

**Table 2. Views on which jobs are better suited to men (% of enterprise)**

|**Functional jobs**|**Better suited to**<br>**men**|**Better suited to**<br>**women**|
|---|---|---|
|Production, Operations, Technical|81.6|18.4|
|Procurement, Purchase|71.4|28.6|
|Business development,<br>Marketing, Sales|62.3|37.7|
|Human resources and<br>administration|62.1|37.9|
|IT support, Computer, Data<br>processing|57.1|42.9|
|Finance and accounts|50.2|49.8|
|Customer service, Customer care|38.2|61.8|

Note: n= 618 enterprises 14
**Do employer attitudes vary by sex of employer?** Some research shows that women may be less influenced by gender stereotypes while hiring. In an experiment with 129 undergraduates, Rice and Barth (2016) find that priming men and women with typical gender stereotype associations about job applicants makes men rate male applicants higher than female applicants. Female participants are less affected by the priming and showed more egalitarian evaluations. Similarly, in her study on US law firms, Gorman (2005) finds that female decision makers tend to fill more vacancies with women only among entry-level hires. This effect diminishes as women's share of high-ranking positions in the firm increases.

Only 10 percent of the enterprises in our data set were headed by women and, as pointed out earlier, these were mostly micro units run as sole proprietorships, with the majority having only 1-2 employees. Most of the enterprises owned by women were concentrated in services such as tailoring or were salons. The 10 manufacturing firms that were operated by women were engaged in textiles and in the food and beverage industry. Overall, female heads of enterprises in our sample held more positive attitudes about women’s work. More female employers than male for instance, agreed that women should work after marriage (96 percent compared to 84 percent), and fewer believed that men make better employees than women (38 percent compared to 42 percent male respondents; figure 8). Fewer female employers also agreed with the statement that men are better suited to jobs in each functional area, the sharpest difference being observed in opinions regarding the production/technical/operations domain, where more than 80 percent of male employers thought that men were better suited for these jobs, compared to 62 percent of female employers who held such views.

While in other attitudes female employers tended to be more egalitarian, they were more conservative when it came to the question of whether men should have more right to a job when jobs are scarce (figure 8). They were also more exacting in the parameters they considered as being important for hiring women: they laid greater emphasis on job-related skills and ranked them as being more critical for hiring women than the male employers did. ‘Softer’ skills such as communication were not considered as important. This could be related to several inherent biases and life experiences. To start with, merely owning and operating a business does not make women less patriarchal. Further, drawing upon their own experience and career trajectories, women may regard themselves as being better workers, because of their own hard work and grit and may therefore be more demanding of the women they hire.

# **Figure 8: Share of respondents who say that men have right to a job and make better employees, by gender of respondent**

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<!-- Start of picture text --> % who agree to the following statement<br>70 65<br>60 52<br>50 42<br>38<br>40<br>30<br>20<br>10<br>0<br>Men have more right to a Men make better<br>job (when jobs are scarce) employees<br>Male Employer Female Employer<br><!-- End of picture text --> Note: n= 618 employers

# **7. Multivariate results**

In our multivariate analysis, we estimate the extent to which firm characteristics, location and employer attitudes affect the likelihood of a firm having at least one woman. We report the results in table A2 (table A1 provides the means of the variables used in the multivariate). Panel 0 includes the effects of firm characteristics, city and geographical spread of operation. The successive panels add the effects of attitudes, one at a time, where each attitude is coded as a dichotomous variable. Panel 1 contains the effects of the attitude that men and women should have equal wages and benefits for equal work; panel 2 includes the effect of the attitude that men have more right to jobs when jobs are scarce; panel 3 adds the attitude that men make better employees than women; panel 4 adds the attitude that girls should be as educated as boys and panel 5 contains the view that women should work after marriage. Finally, panel 6 regresses all variables.

We find that smaller firms have a slightly higher likelihood of having a woman employee. Younger firms are also more likely to have at least one female employee, but the result becomes significant (at the 1 percent level), only when we add an attitude variable. On the other hand, firms that engage in services are on average over 30 percent less likely to hire a woman, compared to manufacturing firms and this result is highly significant. Recall that in the multivariate analysis, we dropped women owned enterprises from the sample. This means that enterprises in services such as say tailoring or beauty salons, which are mostly female owned, were not in the sample and these were probably where women employees were also concentrated. When we look at city, we find that Bhopal-based firms have the highest likelihood of hiring a woman and the city effect is highly significant. Gwalior-based firms are on average 24 percent as likely and Indore based firms on average 41 percent as likely as Bhopal based firms, to have at least one woman on their payroll.

The area or expanse within which the firm operates is also highly significant. Firms that sell their goods or services only in the local area are far less likely than firms that operate across the state or beyond, to hire a woman. In fact, firms that supply to other 16
units in MP or in India are over 6 times as likely, as firms that operate locally, to hire a woman. Finally, as far as firm characteristics are concerned, the higher the share of temporary employees, the more likely the firm is to hire a woman. This could mean that high levels of informality increase the chances of a woman being hired in the enterprise, or that women tend to have or accept, more precarious contracts. In sum, micro enterprises engaged in manufacturing, compared to services, those operating in Bhopal, compared to Indore or Gwalior, those with a broader geographical ambit and those with higher shares of temporary employees, are more likely to hire at least one woman.

Adding attitude variables matters only slightly to the chance that a firm will have at least one female employee. Gendered attitudes that we observed at the bivariate level are borne out at the multivariate level as well, but most have no statistical significance, except that employers who say men and women deserve equal wages and benefits for equal work are almost four times as likely to have a female employee, as compared to those who do not hold such a view. But while the size of the odds is large there is little variation, since a large majority holds this view. The reverse construction is a more relevant result. Thus, employers who do not believe in wage equality are also less likely to have a female employee. The only other attitude that seems to matter is whether the hiring manager thought women should work after marriage. Here too, the more relevant result is that those who believe women should <u>not work after marriage are also less</u> likely to have a female employee.

Overall, attitudes, as measured in this survey do not seem to matter for whether a firm hires a woman or not. Adding attitude variables does not have much of an effect on firm characteristics either; both the effect of firm size and firm age, change in statistical power, but only faintly. Size becomes less significant and age of firm becomes slightly more significant.

# **8. Discussion and Implications**

Our results reinforce the conventional wisdom in some ways and are surprising in others. The most salient result is that employer attitudes matter much less for the chance that women will be hired, than do firm and location characteristics. The most important implication of our results is that they question an implicit assumption that culture is slow and hard to change and so, women will stay out of the labor market until social change occurs. This in turn has significant policy implications, the most important of which is that female employment in urban India is amenable to policy intervention and that we do not need to wait for culture to change.

To recap our findings, which firms are more likely to have at least one female employee? We find that micro enterprises, firms that are engaged in manufacturing, those operating in Bhopal, compared to Indore or Gwalior, those with a broader geographical ambit and those with higher shares of temporary employees, are more likely to hire at least one woman. At the univariate level, we find that service sector firms are more likely to hire women, but this advantage vanishes once we remove women-owned firms (for reasons of collinearity).

Our second major finding is related to attitudes. The vast majority of employers espouse socially acceptable attitudes about women’s work and education, especially as there is 17
no implication that these would affect their own families or firms. So, most agree that boys and girls should be equally educated, women should work after marriage and men and women should be equally compensated for equal work. At the multivariate level, employers who do not believe in wage equality are also less likely to have a female employee as are those who believe women should <u>not work after marriage. The</u> variation across attitudes becomes much more inegalitarian when employers are questioned about the relative role of women and men as breadwinners, with over half saying that men have greater claim on jobs when jobs are scarce. There is similarly greater variation in the attitude that men make better employees than women do and that some jobs are better suited to men (or to women). The last attitude bears out in specific terms, where employers tend to reinforce the prevailing norms of occupational sex segregation.

It is of course the case that firms are often bastions of occupational sex segregation and they internalize a discriminatory culture, such that individual employer attitudes do not need to matter for hiring. Hence, as pointed out earlier, there is no watertight distinction between culture and attitudes on the one hand, and firm characteristics on the other. Each reinforces the other in different and complex ways. Another caveat in these results relates to the measurement of attitudes. As pointed out earlier, attitudes are infamously difficult to measure, and we often do not know what we are really capturing. Regardless, this survey is the first of its kind for a large cross section of private firms and the results may be considered counter-intuitive. It tells us that future studies need to refine the measurement of attitudes to assess the extent to which they matter for hiring women in different contexts.

We have three additional findings that deserve reiteration and have implications for policy and action. The first of these relates to the hiring process. We find that social networks matter much more than formal avenues of job search, especially for small and micro enterprises. This disadvantages more women compared to men, because the former have fewer networks, are less likely to move in circles where information about jobs is shared, and possibly less likely to be on electronic media. Women are also less likely to actively search for jobs in situations where they may have a starting disadvantage or may feel that they have a disadvantage. Another finding is that the characteristics employers look for in male and female candidates vary by occupation. While most employers rate years of experience, job related skills and a right work ethic as the top qualities they would look for in a female employee, they rate a woman’s willingness to work long hours as the third most important quality – one that they do not consider as being important for men. Finally, we find that hardly any of the firms offer maternity leave or childcare. In fact, a little over one-fourth of the firms in our sample offered any benefits at all, and those that did, provided bonuses, incentives and/or food, and tended to be large and medium enterprises.

What are the implications of these findings and what can policy, associations of industry or lobbies that promote women’s employment do? It is likely that incentives such as transportation, childcare and paid maternity leave to women could improve the chances that more women would be employed, but small and micro firms may not be able to afford this and still stay profitable. Hence, there may be a case for fiscal or other incentives by government to firms to encourage hiring of women.

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Our results also point to a strong need to improve women’s access to information about jobs and to networks. Simply knowing where the jobs are, who is hiring, how the hiring process works and how they can market their skills, will likely have salutary effects on the chance that they are hired. Exclusive, women-only job portals can help improve the information women have about available job opportunities – ranging from full time work, to flexible and entrepreneurial work options. Besides providing women access to information, such portals can provide them with a platform to engage with businesses (as employees, partners, customers or business owners), and serve as a clearinghouse for mentorship and career support programs. Associations of industry could sponsor more effective networks of prospective female employees and help in moving women’s access to job markets forward. It is important however, that such networks reach the women who need them most and do not self-select women who are already well networked. Similarly, while vocational training programs can help, earlier experience with them in India suggests that distance and lack of child care facilities at training centers can be significant obstacles to women accessing them (World Bank 2019).

Finally, one of the measures that can orient a reticent job market about hiring women is dedicated internships for young women. Such internships, especially in small enterprises, can enhance both opportunity for women and give support to employers who may not have had experience with female employees and may be reluctant to employ them. Educational institutes including schools, colleges, Industrial Training Institutes and vocational training centers can have special cells to focus on mentoring and counseling of female students, to support then in placement and internships or fellowships in local enterprises. Ultimately, it is the coordination between industry associations, the government, educational institutions and the private sector that can make the difference for women’s access to skilled jobs in the urban labor market. Unless there is a joint commitment to increasing women’s employment, many of the actions outlined above will have only limited impact.

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