Segmented Labour Markets: How Gender and Caste Shape Work Opportunities

Two women apply for jobs on the same morning. One walks into an air-conditioned office as a chartered accountant with a written contract, paid leave, and provident fund. The other rolls beedis on the floor of her one-room home, paid by piece, with no contract, no health cover, and no certainty of work next week. This is not just a story about education or luck. It is the lived reality of a segmented labour market, where a worker’s gender, caste, and class often decide which door of the economy will open for her.

What are segmented labour markets? 🔗

The idea of a segmented labour market challenges the textbook assumption that workers move freely between jobs based on skill and merit. Instead, it argues that the economy is split into compartments with very different rules, wages, and protections, and that mobility between these compartments is restricted by social identity. The dual or segmented labour market theory divides the economy into a primary sector and a secondary sector, and goes further to include factors like race, caste, and gender that shape who ends up where.

In India, this segmentation is sharp and visible. Researchers studying urban labour markets have long noted that Indian wage structures are split along lines of caste, sex, ethnicity, language and region, and that this segmentation gives employers access to a flexible, low-cost workforce willing to take on the most insecure work.

The primary sector: stability and protection 🔗

The primary sector is what most students picture when they think of a “good job”. It offers regular salaried work, written contracts, employer-paid social security like provident fund and gratuity, opportunities to be promoted, and legal protection from arbitrary dismissal. Jobs in the civil services, public sector banks, large private firms, IT companies, and universities fall here. Wages are higher, the work is steadier, and workers can plan their lives around predictable income.

The secondary sector: low wages and insecurity 🔗

The secondary sector looks very different. Workers here move in and out of jobs quickly, earn low piece-rate or daily wages, have no written contracts, and are largely invisible to labour laws. Think of domestic workers, agricultural labourers, construction workers, beedi rollers, street vendors, and home-based garment stitchers. According to the final report of the National Commission for Enterprises in the Unorganised Sector, workers in India’s unorganised sector make up over 90% of the total workforce, and women form an overwhelming share of this segment.

Crucially, this is not a women’s “choice” in any meaningful sense. The economist L.K. Deshpande observed long ago that wages in female segments of the labour market are usually lower than in comparable male jobs, and that this gap is sustained by preconceived social roles assigned to men and women, with women pushed into the secondary job market on the assumption that their skills and human capital are inherently lower.

Why women cluster in the secondary segment 🔗

Several forces work together to keep women in the lower rungs of the labour market. First, unpaid domestic and care work falls disproportionately on women, leaving them less time and flexibility for full-time formal jobs. Second, employer biases code certain occupations as “feminine” and therefore lower-paid: stitching, teaching young children, nursing, cleaning, and care work. Third, social norms around mobility, dress, and respectability narrow the range of jobs that families find acceptable for daughters and daughters-in-law.

The numbers reflect this. The Periodic Labour Force Survey 2023-24 records that India’s female labour force participation stands at 41.7%, even though women now match or surpass men in higher education enrolment. The paradox is striking: more degrees, but not more access to the high-return jobs where those degrees actually pay off.

Wage gaps that refuse to close 🔗

Even when women do find paid work, the wage gap is staggering. PLFS data shows that in casual labour women earn around 69% of male wages, while in self-employment women earn just 36% of what men earn. The self-employed gap is the widest, partly because women’s self-employment is dominated by tiny home-based enterprises with very low margins. Even in regular salaried work, where written contracts and legal minimum wage protections apply, women consistently earn less than men in comparable roles.

How caste and ethnicity deepen segmentation 🔗

Gender alone does not explain the structure of Indian labour markets. Caste, tribe, and religion intersect with gender to create layers of disadvantage that the NCEUS and several academic studies have documented in detail. Scheduled Castes (SCs) and Scheduled Tribes (STs) are disproportionately associated with low-paid, dead-end and insecure employment, and face higher transaction costs when trying to enter regular wage employment in the organised sector.

The triple burden faced by Dalit women 🔗

For a Dalit woman, the disadvantages stack. She faces gender bias as a woman, caste discrimination as a Dalit, and economic deprivation as a member of an asset-poor household. Scholars describe this as a “triple burden” of gender, caste, and class that shows up in every human development indicator, from literacy and longevity to wages and unemployment rates. Dalit women are concentrated in the most stigmatised occupations, including manual scavenging, agricultural labour, brick kilns, and domestic work, and remain especially vulnerable to bonded labour and trafficking.

Evidence on occupational segregation 🔗

Studies measuring occupational segregation using national employment surveys confirm the pattern. Females are more segregated than their male counterparts in both rural and urban sectors, and among social groups, SC and ST groups show higher levels of occupational segregation than upper-caste groups. The “Caste and Labour Market” study by the Indian Institute of Dalit Studies finds that discrimination operates through both employment access and wage levels, pushing workers from discriminated groups into low-earning occupations in the informal sector.

New forms of segmentation in the modern economy 🔗

Liberalisation and the rise of India’s service economy were once expected to dissolve old hierarchies. They have not. Recent research on women workers in cities like Hyderabad, which has become an IT hub, shows that even modern informal service work is sharply segmented. Beyond the older lines of caste, gender, and education, new forms of segmentation are emerging based on age, appearance, and intra-household constraints, restricting women to a narrow set of jobs in beauty parlours, retail counters, call centres, and domestic services.

Seasonal and circular migrant workers, who are increasingly important to construction and manufacturing, sit at the very bottom of this hierarchy. They are recruited and fragmented along lines of caste, sex, language, and region, which makes collective bargaining almost impossible.

What the NCEUS report recommended 🔗

The NCEUS, set up in 2004 under the chairmanship of Arjun Sengupta, was meant to be both an advisory body and a watchdog for the informal sector. Its work mapped the size and conditions of the unorganised workforce and proposed a comprehensive policy response. Its recommendations were not just about wages or job creation in isolation. They tied together three big ideas: social security, skills, and support for micro-enterprises.

On the skills front, the Commission noted that only 2.5% of unorganised sector workers had any formal training, and proposed a National Mission for Development of Skills targeting 50% formal training in the labour force. On enterprises, it recommended a dedicated National Fund for the Unorganised Sector (NAFUS) to support tiny businesses excluded from conventional banking. On social security, it pushed for legislation guaranteeing a minimum floor of protection for all informal workers.

Why policy must be intersectional 🔗

If gender and caste shape who lands in which segment, then policy that targets only gender, or only caste, will keep missing the women who sit at the intersection. Inclusive labour policy needs to do at least four things together.

Expand formal employment with a gender lens 🔗

Reform must widen women’s access to higher-paying occupations rather than just push more women into low-quality jobs. Sectors like infrastructure, construction, and machinery operation employ women in single-digit percentages, and apprenticeship slots and enforceable standards for safe worksites would open routes that current dynamics block.

Strengthen social protection in the informal economy 🔗

A floor of social security – maternity benefits, pensions, accident cover, health insurance – must reach domestic workers, home-based workers, agricultural labourers, and street vendors. The four labour codes attempt this, but their implementation depends heavily on registering informal workers and funding the schemes adequately.

Tackle caste-based discrimination directly 🔗

Anti-discrimination law in India largely focuses on public sector reservations. A more comprehensive framework, covering private sector hiring, wages, and workplace conditions, would help workers from SC, ST, and OBC groups, especially women, move out of stigmatised occupations.

Invest in care infrastructure 🔗

Without affordable childcare, elder care, and reliable public services like water and sanitation, women cannot enter the primary segment in large numbers. Care infrastructure is labour market infrastructure.

The bigger picture 🔗

Segmented labour markets are not a glitch in the system. They are how the system has been built, reproduced through policies, social norms, employer practices, and household decisions. Understanding the link between primary and secondary sectors, and how gender, caste, and class together decide who works where, is essential for anyone studying gender and society. The NCEUS framework was a major step toward making the invisible workforce visible. Carrying that vision forward, with intersectional, gender-responsive policy, is the unfinished agenda.

What do you think? When you look around your own neighbourhood or hometown, can you spot which jobs are coded as “women’s work” and which are reserved for men, and how caste shapes that picture? And if you had to redesign just one labour policy to make work fairer for women in the informal sector, which would you choose, and why?

References

1. https://en.wikipedia.org/wiki/Dual_labour_market
2. https://link.springer.com/article/10.1007/s41027-019-00178-5
3. https://ruralindiaonline.org/en/library/resource/report-on-definitional-and-statistical-issues-relating-to-informal-economy/
4. https://egyankosh.ac.in/bitstream/123456789/42405/1/Unit-9.pdf
5. https://www.policyedge.in/p/why-opportunity-not-pay-drives-indias
6. https://vajiramandravi.com/current-affairs/gender-wage-gap-in-india/
7. https://labourmarketresearch.springeropen.com/articles/10.1007/s12651-013-0152-z
8. https://theglobaljusticenetwork.org/index.php/gjn/article/download/54/85
9. https://www.researchgate.net/publication/273904036_Occupational_Segregation_in_the_Indian_Labour_Market
10. https://www.epw.in/journal/2021/21/special-articles/caste-and-labour-market.html
11. https://www.tandfonline.com/doi/full/10.1080/08039410.2025.2504501
12. https://csr.education/development-in-india/strengthening-indias-unorganised-sector-nceus-recommendations/