The Inequality Within: Why Women’s Wages Reveal India’s Next Growth Test
Most of India’s wage inequality among women lies within communities, not between them – revealing the new frontier of inclusive growth
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Anam Pandoh: IIT Bombay
Ashish Singh: IIT Bombay
SDG 10: Reduced Inequalities | SDG 8: Decent Work and Economic Growth
Ministry of Labour & Employment | Ministry of Women & Child Development | Ministry of Skill Development & Entrepreneurship
India’s gender wage debate has always turned on one question: why do women earn less than men? The answer still matters. But new evidence suggests that question alone no longer captures the reality of inequality. The deeper divide now runs within women themselves.
A recent analysis of the Indian Human Development Survey (IHDS), covering more than forty-two thousand households across 2004–05 and 2011–12, finds that women in India are diverging sharply in earnings even when they share the same caste, religion, region, or rural-urban background. The familiar story of “men versus women” now conceals another story: women versus women.
This is not a marginal wrinkle in the gender story. It is a structural pivot.
Numbers That Redraw the Map
The scale of divergence is stark. Wage inequality among women in 2004–05 already stood at around 0.60 on the Gini index – a standard measure of inequality where 0 means perfect equality and 1 means complete inequality. By 2011–12, it rose to 0.62 - remarkably high for any labour segment. But the more significant insight lies in what drives that number.
When inequality is decomposed, more than 90 percent of wage disparities among women come from differences inside social categories, not across them. Religious differences across women account for barely 2-3 percent of total inequality - meaning 97 percent of the gap exists within Hindu, Muslim, and other women themselves. Even the sharp rural-urban wage gulf - with urban women earning over three times rural wages - conceals a similar dynamic: nearly 80 percent of the disparity is internal to each setting.
The conventional categories still signal disadvantage. SC/ST women earn the least; Muslim women have the lowest average wages; rural women remain far behind urban earners. Yet these averages now obscure a more uneven reality: within every group, a smaller cohort of women is accelerating while many remain on the same rung. The gender gap persists - and inside it, a quieter stratification has taken root.
Urban Advantage, Unequal Rewards
India’s urban story captures this transition clearly. City wages for women are multiples of rural earnings, but the spread within urban women is significantly larger. As the modern economy rewards education, digital access, sectoral mobility, and networks, opportunity stretches for those positioned to seize it - and narrows for those who are not.
Rural India, by contrast, shows lower levels of absolute income but a slightly flatter internal distribution. The implication is not romantic; it is structural. Urbanisation, without deliberate scaffolding, can widen inequality inside the gender even as it raises average wages. Cities expand opportunity - but not evenly, even among women.
Regions and the Ladder Within
Regional variation reinforces this layered picture. Southern states, consistently ahead on social development and public investment, record the lowest wage inequality among women. Central and Eastern regions, home to states with historical social and economic constraints, record the highest.
But again, the real story lies inside regions. Across the North, Central, and East, within-group differences among women account for the majority of wage inequality. Geography shapes the stage, but the steepest gradients run along the ladder within each setting.
Why Vertical Inequality Matters
The analysis does not assign causality, and it is important not to retrofit certainty where the evidence is careful. But the patterns align with long-documented features of India’s labour market. Occupational segmentation persists; many SC/ST and OBC women remain concentrated in informal and casual work while a fraction enter salaried roles. Urban economies reward education and access unequally. Social capital, networks, and bargaining power vary even among women who share identity labels.
As markets diversify and formalise, opportunity multiplies - but so does the possibility of unequal uptake inside communities. This is inequality not only between hierarchies, but within them.
Seen another way: India’s gender question is no longer only “Why do women earn less than men?” It is increasingly also “Why do some women, who share the same social starting points as others, earn so much more than others?”
That shift has consequences for how India imagines inclusion.
From Category Thinking to Mobility Thinking
For decades, gender policy has been designed through categorical lenses: women, SC women, Muslim women, rural women. That architecture was necessary when discrimination was formal, codified, and group-based. But when over 90 percent of wage inequality among women stems from intra-group divergence, category thinking alone risks reinforcing advantage for those already closest to opportunity.
Policy now needs a mobility lens. It must see the rungs inside the group, not just the group label. That means focusing support on women at the base of each distribution, not only the average woman in each category. It means treating childcare, skill access, safe transport, digital capability, and workplace protections as core mobility infrastructure, not peripheral support. It means recognising informal work - where most women remain - as a structural priority, not a residual pool.
A one-size-fits-all strategy for “women” will struggle in a world where women are stratifying from within.
The Next Frontier of Inclusion
The first phase of India’s gender policy aimed to bring more women into education, labour markets, and public life. That project remains unfinished and vital. But the next phase must recognise a harder truth: inclusion has tiers.
Averages are not progress if they mask widening gaps inside the category. A small set of women - even from historically disadvantaged groups - can leap ahead in a liberalising economy, while many others remain constrained by norm, location, or labour market structure.
The measure of gender equity is no longer only whether women move up. It is which women do - and whether those left behind are visible in the policy frame.
India has long debated whether growth is inclusive. The evidence now points us to a more precise question: is inclusion itself inclusive - even among the women it seeks to uplift?
To see the inequality within is not to undermine the gender project. It is to strengthen it. For India’s next leap in women’s economic empowerment, the most urgent truth may be the simplest: the road to equality does not end at the gender line. It runs through it.
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The discussion in this article is based on the authors’ research published in PLoS ONE (Volume 20). Views are personal.