1. 1
POL S/ Econ 409
Judy (Chu) Zhuang
Jennifer Noveck
Aug 20th, 2015
Domestic Worker Policy in India
Executive Summary
Domestic workers in India face prominent inequality issues including, gender
disparity, child labor, and low levels of social welfare benefits. Domestic workers are
marginalized in the sense that most domestic jobs are cooking, babysitting and running
errands (ILO, 2010, 1). Gender disparity is an ongoing issue with the ratio of male to
female as high as 83:17 (ILO, 2010, 21). While many children under the age of 15 are
employed as domestic worker, the working condition is stagnant and no legislation so far
has enacted to eliminate psychological and emotional abuse to child labor (ILO, 2010,
28). The Ministry of Labor and Education (MOLE) and government have legislated the
Skill Development for Domestic Workers. This policy aims to improve domestic
workers’ skill capacity in the labor market to enhance their living standards. However,
the effectiveness of the policy is constrained because it has not addressed the working
conditions for domestic workers in the long run. Therefore, I strongly urge the MOLE to
consider making changes to this current domestic workers’ policy.
Targeting at fixing the persistent flaws embedded in current domestic workers’
policy, this paper identifies three potential approaches for India government: reforming
education system, eliminating child labor, and increasing minimum wages. Each
approach has advantages and disadvantages depending on administration’s endeavors and
people’s participation rate. My first approach is education reform. India Government

2. 2
should provide incentives, obligations as well as financial aids for children to obtain
education from Grade K to 12. For poor households with lower status and less financial
resource to invest in children’s education, public funding and legislations on primary and
secondary education are urgently needed. The wide availability and increased quality of
education can be a sustained foundation for individual’s capability development as well
as for creativity and competitiveness. The second approach is eliminating child labor.
Child labor widens gender gap and creates detrimental consequences domestically and
internationally. Government should urge firms to comply and enhance codes of conduct.
To keep close eye on violations in contracts and fight against bribery or corruptions,
labor inspections and mandatory audits in labor-intensive sectors and firms by NGOs are
strongly recommended to increase transparency. The third approach is increasing
minimum wage. Minimum wages in India are still very low compared to other
developing countries and to the increasing living costs. Therefore, increase in minimum
wage would be a solid solution to provide sustainable living conditions for the low-
skilled workers and to reduce the significant inequality in labor income distribution.
Overall, after weighing the pros of cons, I propose policy changes to focus more
on education reform to protect domestic workers.
Overview and Background
India has exhibited unprecedented economic growth over the recent years. GDP
per capita has nearly tripled over the past decade, reaching 1262 USD (see Figure 1),
national poverty trend is heading downhill; average real wage increases annually, peaking
1$295 monthly manufacturing workers have a securer working environment. Though
1 World Bank Data (2010) See http://data.worldbank.org/country/india

3. 3
India has experienced positive outcomes on national scale, changes need to be made on
current policy to enhance domestic workers’ living standards.
Statement of purpose:
Stagnant improvements in domestic worker’s livelihood, low schooling rates,
society’s reluctance to recognize domestic workers’ visibility have highlighted why the
Ministry of Labor and Education in India needs to turn the focus around and make policy
changes. According to World Bank data, unemployment rate in India is 4.9%, while
youth unemployment rate as high as 12.9%; average wage rate is 4.83 INR/day, average
wage in manufacture is a bit higher but still no more than 6.25 INR/day (see Table 1).
Many of the domestic workers till this day are living in villages and slums where they
have limited access to transportation and markets (Roy, 2002, 2). They are still forced to
work long hours, sleeping on floors and face various threating and mistreats (Yee, 2014).
Poor living conditions show domestic workers’ social well-being hasn’t changed for the
better. These horrific treatments of domestic workers have not been fully recognized by
society or the MOLE. Education turns out a big problem for labor participation and
domestic labor market. Based on India census 2011, at national level, total adult literacy
rate is 74%, which means current education can hardly meet the demand of domestic
labor market. Besides the low percentage in education enrollment, gender gap in
education is significant, male literacy is 82%, while female literacy is just around 65%,
and as low as 52% in some state (See Table2).
What is currently being done?
India government and MOLE have currently enacted skill-development policy by
providing special job training programs to enhance national skill development strategies

4. 4
(Agnihotri, 2011,5). Government has decided to provide incentives, create opportunities
for diversified job training programs and make assessments in a timely manner. Specific
job training ranges from childcare to cooking, depending how much the skill sets have
increased, and domestic workers get paid on average approximately $41 per month (ILO,
2011). According to National Skill Development Policy (2009), government is also
making an effort to change distribution and patterns within the workforce. Such as “rise
in self-employment, greater sub-contracting, outsourcing, increasing worker to work
away.”
Issues:
While the Skill Development Policy by State government and MOLE provides
stability and flowing incomes to poor households and benefits female workers’ self-
esteem to certain extent, it magnifies the pre-existing issue of inequality. The remaining
problems that need to be put into agenda are drastic social welfare conditions, gender
discrimination and child labor.
Current policy neglected the importance of how education improves social
welfare. Higher level of education brings higher pay. Domestic workers earned 23.4%
less than workers who perform the same task elsewhere (ILO, 2010, 7). Current domestic
worker’s annual average wage ranges between 4200- 9600 Rupees while college
graduates earn up to 225,000 Rupees (WEIGO, 2008). The huge wage disparity occurs
because society preserves the perception they are “unproductive” workers and are
socially disadvantaged (ILO, 2010, 7). A major discrepancy in annual wage between
college graduates and domestic workers highlights the idea education can bring higher
wage and better livelihood.

5. 5
Current policy’s attempt to improve gender equality is weak. Despite the India
government has legislated many issues relates to women’s equal rights, like 44 Central
laws (Basu, 2009, 2), gender discrimination issues still persists. The reality that women
are still in a “subordinate position compared to men” (Basu, 2009, 1) is appalling. The
numbers of domestic workers in India range from 2.5 to 90 million, 3.5 million of which
are females (ILO, 2010, 14). The data from ILO (2010) shows the dramatic differences in
labor participation rate between male and female where the ratio is 68: 27. Women have
limited access to jobs in engineering, medicine and business (ILO, 2010, 8). Because
intuitively women are perceived as labor machines bounded with housework and
childcare and are emotionally unstable most times. Therefore they are less productive and
remain lower rank in the society compared to men.
Current policy fails to display promising results toward the issue of child labor.
The majority of child labor generates from domestic workforce and over 50% are under
the age of 15 (ILO, 2010, 29). Child labors have a higher flexibility to be sent elsewhere.
One is because they lack entitlement or any awareness to workers’ rights. Second is that
they are readily to be controlled by employers, and third is due to cheap labor costs. They
cannot get any safety or health insurance from employers; many child labors suffer from
hunger, inhumane working conditions and poor treatments. Low licensing from agencies,
low guarantee for timely payments, frequency of sex trade and debt bandage have
intensified the risk for child labor and made child labor the prime victims of illegal
activities.
NGOs’ perceptions:

6. 6
According to one domestic NGO, Maitri, the main goal of the policy was enabling
higher qualifications to translate into higher pay rather than education. Maitri believes the
program has established a close relationship between the female domestic workers and
micro financing institutions to promote job-training divisions (Sarkar, 2013). As a result,
there is a sharp increase in the participation rate of female domestic workers. Seemingly,
gender equality has improved. Villages and neighboring towns formed a “village
economy” (Roy, 2002) to freely deliver information. Therefore, domestic workers have
wider access to any updates relating to job-training programs and encourage more people
to participate. Maitri also witnessed that the training program focuses on “soft skills,
including communications, decision-making skills” (Sarkar, 2013). They advocated the
skill-development policy could secure a definite career path for domestic workers
through intensive soft skill trainings
Necessity for change:
Current policy fails to address the following severe problems in domestic labor
market: disparities in gender, unfair socioeconomic conditions and child labor. These
loopholes are impeding India to thrive and grow sustainably. Domestic workers are still
treated unequally and even regarded as “invisible” (Agnihotri, 2011,5). Also, with 2only
3.3% in GDP (less than many developed and developing countries) devoted to education,
India faces the obstacle for helping more people emerge from poverty and achieve a
sustainable economic growth. Therefore, there is a necessity to make changes in the
current policy.
Discussion
2 World Bank Data (2014) See http://data.worldbank.org/topic/education

7. 7
I propose three options to improve the well being of domestic workers in India by
enhancing government’s current skill development policy. The first option is education
reform through targeting children in poor areas in India. Domestic workers face serious
difficulties in finding alternative jobs due to their “lower-than–average formal education
or absence of economic opportunities” (ILO, 2010, 6). Education can provide diverse job
selections for domestic workers because high-skilled jobs require parallel level of
education. Higher education greatly reduces the likelihood of unnecessary physical and
emotional abuse. Studies shown despite employers perceive working conditions as safe, it
can be hazardous for domestic workers (National Domestic Worker Alliances, 2007, 6-7).
Out of 242 domestic workers, 194 have experienced certain degree of physical and verbal
abuse (National Domestic Worker Alliances, 2007,11). Compared to domestic workers
(80.2%), healthcare professionals face slightly 25% chance of physical abuse (Swahnberg
et al , 2009,3). Also, women reported to have higher abuse rate compared to men
(Swahnberg et al , 2009,1). This evidence indicates higher education reduces the risk of
physical abuse. India’s current education system has no learning value, poor
infrastructure and money (Swami, 2013). And household poverty is evidenced as the root
for low literacy rate (Kaur, 2013, 1) because lack of money indicates insufficient access
to educational resources.
To turn the situation around, government should provide incentives, legal
obligations and financial aids for poor households to keep their children in school.
Economically, government faces huge deficits due to lack of funding. Politically and
socially, perceptions weigh in the decision of the importance of education and determine

8. 8
the amount of effort putting in. For security reasons, due to poor infrastructure, the safety
of young children going to school is hard to be guaranteed.
Second option is to eliminate child labor. The crucial step is to launch legislated
federal law stating any entry of underage person, especially females, to firms is strictly
prohibited. Previously, the Child Labor Act in 1986 sort out to collect fines to firms when
they employ children (Basu, 2005, 2). However, the result backfired and led to a period
of increase in child labor. Due to low labor costs in children, firms were willing to pay
the fines and continued to hire children. Therefore, supervision from NGOs in labor
intensive divisions of firms is not negotiable. Firms should also have weekly board
meetings regarding the issues of hiring protocols where they will learn about the
obstacles ahead. Reports and weekly audits should be handed to the NGOs promptly.
Government must impose legal frameworks, like implementing legislative laws,
conducting interviews, to make adjustments to firms’ human resource department. The
main purpose is to prevent illegal trafficking and protect children from harm. Compared
to the first option, economically, governments experience less financial burden and firms
are taking responsibility to make compensations during compliances. Politically,
government empowers more regulations and has a bigger say in the matter. However,
trust disputes and alienation would merge among various parties. High risk of trafficking
and debt bondage is a persistent problem, which are hard to alternate in a short span of
time.
Third option is to increase minimum wage. This heightens domestic worker’s
visibility and increases their living standards. There are several reasons. First, increasing
in minimum wage gives people higher purchasing power, since demand for most

9. 9
necessity goods is fairly inelastic in price. Second, increase in minimum wage raise social
awareness toward domestic workers. They have competitive ground when it comes to
bargaining goods and have broader access to social welfare. Therefore, their visibility
increases. Economically, evidence has revealed that huge increase in minimum wage
would shift the market back to formal (Dinkelman and Ranchhod, 2012). However,
increase too much in minimum wage would clash the employment rate in the market due
to crowded out effect. Compared to the first option, economically, government faces
fewer burdens by the cost. However, political regimes can sway a lot in the decision-
making.
Recommendation
Taking into account the pros and cons of the three options, I suggest the
government to implement education reform. “Education for all”, is strongly
recommended (Kaur, 2013). Parents, especially in poor household, have the social
perception that children should not go to school and should rather work. However,
education “is not a thing which parents or relatives … should have it in their power to
withhold” (Baland, Robinson, 2000). Education proves to have long-term beneficial
effects and high returns for the child’s future development because it can effectively
realize child’s potential in creativity in the short run (Barnett, Ackerman, 2006, 86).
Education can drastically close literacy rate gaps between female and male,
reduces burdens in households and raises female awareness in their independency. With
low education standard, female are constantly facing subconscious pressure from the
workplace. Jobless women also bring the entire household in jeopardy through putting all
financial burdens on working male (Kaur, 2013, 2). Once females are educated, they can

10. 10
share the pressure of feeding the family by earning higher income, have more flexibility
in job choice (Raju, Phil, 2014; Hu, 2003), and a louder voice when treated unequally in
workplace (ILO, 2010, 49).
While education reform opens door for female domestic workers to compete fair
and square and improve their awareness on their legal entitlements, India’s legislation on
Minimum Wage Act seems to have less effect on “the extensive margin in terms of
employment opportunities”(Gudibande, Jacob, 2015). Education can take effect in the
long run to improve skill level and labor productivity, reduce gender gap in labor market
and mobilizing more families from poverty.
Eliminating child labor cannot raise the awareness of independency for domestic
workers. Because the detrimental effects on children is fairly deep rooted. Parents’
dominant control over children is another reason the second option won’t work. Chronic
and drastic poverty may induce parents to use their children as a source of income or
encourage them to join labor force at early age, rather than send children to school.
According to a study, parents are altruistic and child labor is socially inefficient, it may
arise in equilibrium because parents fail to fully internalize its negative effects (Baland,
Robinson, 2000). Consequently, child labor problem is hard to solve without education
reform, legal enforcement and poverty reduction.
Weakness in enforcement mechanisms also proves the other two options may not
work out as effectively as education reform. Compliances between NGOs and firms may
be poor due to weak enforcement mechanism (ILO, 2010, 49). Minimum wage has less
incentive to improve domestic worker’s living standards unless “accompanied by strong
enforcement mechanisms” (Gudibande, Jacob, 2015, 2).

11. 11
According to Sengupta (2008), the current education system for the poor in India
is appalling. Currently, India has insufficient teachers in rural regions and students of all
age group are cramped in a small classroom. Their manners are deformed and facilities
are ill equipped. Students have complained not having money for school materials. So I
strongly recommend government to put education reform on the top of policy agenda.
Providing better and equal primary and secondary education to different areas in the
country can not only produce next generation with higher skills and more creativity, but
also relieve household burden of dependency, increase labor productivity and labor
income, and reduce gender disparity.
Implementation
The education policy should focus implementing from the bottom to the top. Prior
to my recommendation, there have been trials on improving education standards for
domestic workers. The Government of India has taken several measures to hoist the
status of women in the society. Different plans and policies that have laid emphasis on
women empowerment and the participation rate of women in economic, education, health
and politics to match up with men (Raju, Phil, 2014). However, it is not specific enough.
Promoting enhancement in youth educational program, aiming Grade K to 12 for the poor
in India is the fundamental step. Public education should be legislated through federal
laws to add restrictions toward parents’ perceptions. Beyond that, endeavor from
government plays a vital step in the process of operating this policy.
Government’s enforcement can include signing contracts with parents, obliging parents
not to send kids to work. Government should provide material incentives to poor families
and thus establish trust among households. Such Incentives are majorly financial

12. 12
education aid, scholarships, tuition waiver or cut-down depending on academic
performances. Government can also offer free school bus service, free meal plan and
after school programs such as programming, literature clubs, dance, choir, exploration
club, independent study group for all age and social etiquette class. Lastly, government
should motivate students from 10th -12th grade to pursue global education through
providing distance online courses; international- group seminars because competitive
spirit and creativity create broaden the horizon for young individuals.
The major concern for government in implementing this policy is lack of funding.
To reduce the burden for government, funds should come from all channels, including
private sectors and public sectors. One specific approach could be at the end of every
school year; there would be district talent showcases. Its purpose is to raise funding.
Also, government can welcome private companies or institutions at home or abroad to
invest in primary or secondary education and take part in infrastructure construction.
Local governments should be fully alert on the damaging effect of nation’s low literacy
rate and the gender gap in the workforce. I trust the current Department of Labor and
Education are competent enough to take on the task. Since funding is the main obstacle,
hiring a budget advisor would be wise and effective.

13. 13
Appendices
Bibliography
Agnihotri, N. (2011). “Recognition for India's invisible workers”, World of Work, (72),
29-30.
Baland, J., & Robinson, J. (2000). Is Child Labor Inefficient? Journal of Political
Economy, 108(4), 663-679.
Basu, A. (2009) Harmful practices against women in India: An examination of
selected legislative responses. United Nations.
Basu, K. (2005). Child labor and the law: Notes on possible pathologies. Economics
Letters, 87(2), 169-174.
Barnett S. W. Ackerman D (2006) Costs, benefits, and long-term effects of early care
and education programs: Recommendations and cautions for community
developers, Journal of the Community Development Society, Vol. 37, No. 2,
Dinkelman T. Ranchhod V.(2012) Evidence on the impact of minimum wage laws in an
Informal sector, domestic workers in South Africa, IDEAS
Edmonds, E. V., and Norbert S. 2012. "Poverty alleviation and child labor."
American Economic Journal: Economic Policy, 4(4): 100-124.
Concerning Decent Work for Domestic Workers. (2011). The Economist
(US), 399(8739), 73.
Gudibande R. & Jacob A. (2014). Minimum Wage Law for Domestic Workers : Impact
Evaluation of the Indian Experience
Retrieved from:
http://www.raduateinstitute.ch/files/live/sites/iheid/files/sites/cfd/shared/working%

14. 14
20papers/CFD2015_05.pdf
Hu L. J (2003), The hiring decisions and compensation structures of large firms
Industrial and Labor Relations Review, Vol. 56, No. 4, pp. 663-681
ILO (2010) Domestic Work policy Brief, Remuneration in domestic work,
Retrieved from http://www.ilo.org/wcmsp5/groups/public/dgreports/---
dcomm/publ/documents/publication/wcms_173363. Rights for Domestic Workers
Iosr Journals, & Dr.E.Raju, M.A, M.Phil., Ph.D., Post Doctoral Fellow. (2014).Gender e-
Discrimination in India IOSR Journal of Economics and Finance (IOSR-JEF)
ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 2, Issue 5 (Jan. 2014), PP 55-65
Retrieved from : www.iosrjournals.org
Kaslen, Stephan (2002) “Low Schooling for Girls, Slower Growth for All? Cross‐
Country Evidence on the Effect of Gender Inequality”, Education Economic
Development. 16 (3): 345-37
Kaur, Ramandeep (2013) Low Female Literacy Rate and Its Impact on Our Society
Costs, Benefits, and Long-Term Effects of Early Care and Education Programs:
Recommendations and Cautions for Community Developers, Ministry of Labor,
National Policy on Skill Development (2009) Retrieved from the web
http://labour.gov.in/upload/uploadfiles/files/NationalSkillDevelopmentPolicyMar
ILO (2010), Remuneration in Domestic work, ILO report
Retrieved from Web: http://in.one.un.org/page/rights-for-domesticworkers
National Domestic Worker Alliances (2007), the invisible and unregulated world of
domestic workers, Center for urban economic development
Retrieved from: www.domesticworkers.org

15. 15
Roy, T. (2002). Economic history and modern India: Redefining the link. Journal of
Economic Perspectives, 16(3), 109-130.
Sarkar, Radha, (2013) An Inside look at Domestic Workers in India Spotlight Maitri (Part
One), American India foundation. Retrieved from web:
http://aif.org/2013/09/an-inside-look-at-domestic-workers-in-india-spotlight-on-
maitri-part-one/
Sengupta (2008), Education Push Yields Little for India’s Poor, New York Times
Swahnberg K1. Hearn J. Wijma B.(2009) Prevalence of perceived experiences of
emotional, physical, sexual, and health care abuse in a Swedish male patient `
sample, US national library of medicine ;24(2):265-79.
Swami V. (2013) The present education system in India. NetworkersHome Retrieved
from: http://www.cciemagazine.in/uncategorized/the-present-education-system-
of-india/
Yee, Weiser (2014), Claim Against Indian Diplomat has echoes of previous case, New
York Times.
Williamson, J, & Pampel, Fred C. (1993). Old-Age Security in Comparative Perspective.
New York: Oxford Press
WEIGO (2008) Retrieved from :
www.unicef.org/infobychttp://wiego.org/sites/wiego.org/files/resources/files/dw_
background_note.pdf country/india_statistics)

16. 16
Tables and figure
Table 1: Labor Statistics of India
India Labour Last Previous Highest Lowest Unit
Unemployment Rate 4.90 5.20 9.40 4.90 perce
nt
[+]
Employed Persons 29650.00 28999.00 29650.00 17491.0
0
Thou
sand
[+]
Unemployed Persons 44.79 40.17 44.79 5.10 Milli
on
[+]
Population 1238.89 1223.58 1238.89 359.00 Milli
on
[+]
Retirement Age Women 60.00 60.00 60.00 60.00 [+]
Retirement Age Men 60.00 60.00 60.00 60.00 [+]
Labor Force Participation
Rate
52.50 50.90 52.90 50.90 perce
nt
[+]
Wages 4.83 5.07 5.47 3.12 INR/
Day
[+]
Wages In Manufacturing 6.25 6.55 6.97 3.92 INR/
Day
[+]
Youth Unemployment Rate 12.90 18.10 18.10 12.90 perce
nt
[+]
Data source: http://www.tradingeconomics.com/india/indicators
World Bank Data (2014) Retrieved from :
http://data.worldbank.org/country/india
Table 2 Literacy rate Male and Female India 2011 Census
STATES/UT
TOTAL
LITERATE
S
MALE
LITERATE
S
FEMALE
LITERATE
S
TOTAL
LITERAC
Y RATE
MALE
LITERAC
Y RATE
FEMALE
LITERAC
Y RATE
INDIA 77,84,54,12
0
44,42,03,76
2
33,42,50,35
8
74.04 82.14 65.46
Jammu &
Kashmir
72,45,053 43,70,604 28,74,449 68.74 78.26 58.01
Himachal
Pradesh
51,04,506 27,91,542 23,12,964 83.78 90.83 76.60
Punjab 1,89,88,611 1,06,26,788 83,61,823 76.68 81.48 71.34
Chandigarh
#
8,09,653 4,68,166 3,41,487 86.43 90.54 81.38
Uttarakhand 69,97,433 39,30,174 30,67,259 79.63 88.33 70.70
Haryana 1,69,04,324 99,91,838 69,12,486 76.64 85.38 66.77

17. 17
NCT of
Delhi #
1,27,63,352 72,10,050 55,53,302 86.34 91.03 80.93
Rajasthan 3,89,70,500 2,41,84,782 1,47,85,718 67.06 80.51 52.66
Data source retrieved from :
http://indiafacts.in/india-census-2011/literacy-rate-india-2011/
Figure Figure 1. India Per capita GDP (2006-2014)
Data source retrieved from: www.TradingEconomics.com | World Bank