‘Missing twins’ in our labour market

Bollywood wage debates, such as Aamir Khan’s recent (2013) claim that female actors are paid less because they “bring fewer footfalls,” a logic often presented as market reward. Yet this logic assumes away the structural sorting that precedes pay-setting. Female actors are routinely channelled into narrower, supportive, and shorter-duration roles that offer lower narrative centrality and screen time. If occupational roles themselves are gendered, the capacity to “attract audiences” is not an innate individual human-capital trait but a socially constructed outcome of limited opportunities to headline films, build star power, or shape a film’s commercial identity. Unequal pay cannot be justified solely by market demand; the market itself is shaped by biased sorting.

In labour markets, women and men with comparable qualifications often enter fundamentally different job roles. When wage gaps are decomposed, the portion explained by characteristics such as education or experience often pales in comparison to the “unexplained” component — commonly interpreted as discrimination. But sorting speaks to what happens before discrimination is measured. When women are initially assigned to lower-return roles, the “market” rewards them less because they were never placed in higher-return roles.

So, does higher education function as a leveller, enabling women to move out of low-paying occupational clusters, or does the labour market continue to reproduce gendered sorting even when educational credentials are equivalent? In theory, education is a powerful signal of capability, meant to reduce employers’ uncertainty and narrow discriminatory gaps. In practice, however, persistent gendered occupational patterns suggest that education alone may not offset entrenched norms that shape who is hired into which roles, who is promoted, and who is perceived as “suited” for leadership or high-return positions. 

India’s labour market faces gender disparities as the most persistent challenge. Now, women enrol in higher education at rates that rival—and in some streams even surpass—those of men, yet this has not translated into proportional representation in the workforce as their presence in the labour market remains disproportionately low. And even when women do enter the workforce, the gender pay gap remains stark. Even educated women continue to face unequal rewards for equal qualifications. Empirical studies often estimate gender wage gaps by comparing average earnings between men and women. However, the validity of such comparisons depends critically on whether the two groups are truly comparable. When we imagine a man and a woman as a “twin pair,” the question of comparability extends far beyond simple averages—it encompasses occupation, education level, experience, family background, and other contextual factors. Assessment of gender wage differences is possible only when we compare such “twins,” men and women who are alike in all observable characteristics. So, are we comparing true twins? And among twins, does the wage gap persist? 

In India, this problem is referred to as a lack of common support. In countries such as Switzerland and other developed nations, such issues do exist, but the lack of common support is much more pronounced. That is, some occupations are completely segregated for men, and some occupations are completely segregated for women. But in the case of India, this problem is quite asymmetric. A reasonable explanation is that, in India, for occupations with a higher share of female workers, we have very few comparable men as we move up the ladder of women-dominated occupations. However, this does not happen the other way around. Thus, even within occupations, there is segregation: segments in which only women work without comparable men, and segments in which men do have comparable women. This pattern does not mirror that observed in female-dominated jobs. 

So how does this lack of comparable “twins” affect us? The basic interpretation is that women and men work in entirely different occupations. Even within similar occupations, men and women tend to perform different roles. The problem that arises when decomposing the gender gap in such a setting is that the wage-setting process is not comparable in the absence of an appropriate reference group. We cannot simply say: “A woman is doing this job and earning this amount—what would a man earn if he did the same job?” To make such statements, we require comparable reference workers, and this is precisely what the lack of common support denies us.

(Kaibalyapathi Mishra is a Senior Research Fellow and Krishna Raj is a Professor of Economics at CESP, ISEC, Bengaluru)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.