How do you account for the effects of discrimination and inequality on labor outcomes and productivity?

Discrimination in the labour market is the biased treatment of Individuals or Groups based on pre-conceived bias on the basis of race,gender,religion, ethnicity,disability ,sexual orientation etc.to their dis-advantage. It can be exercised at various stages of the labour management chain process,e.g. on-boarding,training,reward management,health care management,promotions etc, which form the core of proper human capital management.

Inequality is exacerbated by structural gaps, such as lack of formalisation, financialisation, urbanization, industrialisation and skilling. Each of the above elements has the potential to reduce the Gini coefficient (used to measure Inequality). For instance in an emerging economy like India with a GDP per capital of ~$2300, bridging structural deficits goes a long way in bridging the divide by bringing up people at the bottom of the pyramid. Access to banking systems (financialisation), access to capital for small business (formalisation), availability of good jobs beyond tier 1 cities (urbanisation) and the means to pick up skills for those jobs (skilling) can all be instrumental in reducing inequality.

Inequality goes beyond a mere measurement of disparities and serves as a reflection of deeper social and structural issues. A unique perspective on inequality emphasizes the inherent interconnectedness of individuals and their collective well-being. It highlights that reducing inequality is not solely a matter of redistributing resources, but also about dismantling systems of privilege and oppression. This perspective recognizes that addressing inequality requires addressing underlying power imbalances, challenging discriminatory ideologies, and fostering inclusive policies that promote social justice.

Measuring discrimination and inequality requires a comprehensive approach that goes beyond traditional methods like wage gap analysis and audit studies. In the context of the Indian economy, it becomes crucial to adopt an intersectional lens, considering factors such as gender, caste, religion, and regional disparities. Longitudinal studies can capture evolving trends, while qualitative research unveils lived experiences. Structural analysis helps identify systemic factors, and a global perspective enables cross-country comparisons. By embracing this holistic approach, tailored to the Indian context, policymakers can develop effective strategies to address discrimination and promote inclusive growth

David Neumark's 2018 article "Experimental Research on Labor Market Discrimination" (https://www.aeaweb.org/articles?id=10.1257/jel.20161309) in the Journal of Economic Literature surveys experimental research on labor market discrimination. It outlines the evolution from regression-based methods to firm-level data analysis and the recent growth of economic field experiments. The research has enhanced understanding of labor market discrimination. This supports the argument that discrimination and inequality are real labor market phenomena, while at the same time highlights the complexity of their measurement and analysis.

One unique perspective in analyzing the effects of discrimination and inequality is through the lens of social capital. Discrimination and inequality can hinder individuals' access to networks and resources, leading to reduced social cohesion and trust within communities. This can impede collaboration, information sharing, and collective action, ultimately impacting productivity and societal development. Moreover, the effects of discrimination and inequality on social capital can perpetuate intergenerational disadvantages. By recognizing the importance of social capital, policymakers can work towards fostering inclusivity, strengthening social networks, and creating an environment that promotes equal opportunities and productivity for all.

Reducing inequality and discrimination is often about helping the people lower down the rung, with a path to upward mobility. Goverment CapEx has a huge role in facilitating this. For every public infrastructure project like rail/ metros/ subways, thousands of direct and indirect jobs, are created. Second order effects mean that better transport enables mobility for people to reach further in search of a productive living. This helps revv up consumption cycles and plays a critical role in reducing inequality by increasing productivity.

One of the most common forms of discrimination that we face is based on gender. One such example is ignorance of the needs of menstruators at workplaces. I was interning with an organisation which had four different flavours of coffee but absolutely no option of having a sanitary napkin machine or any provision of menstrual leaves. This just shows what importance we give to the employees' well being. Upon asking the company as to why this was the scenario, top management blatantly started that they didn't find having a menstrual leave policy or installing a pad vending machine important enough because it is someone's personal needs. This shows how unaware we still are about the basic needs of employees.