The Marginalization and Informalization of Women’s Work

When we talk about economic growth and development, the conversation often centres on GDP numbers, stock markets, and trade agreements. Rarely does it spotlight the millions of women who keep economies running from the shadows – stitching garments at home, selling vegetables on the street, or rolling bidis for a few rupees a day. These women are not just participants in the economy; they are its invisible backbone. Yet, their work remains largely unrecognised, unprotected, and undervalued. This is the story of how women’s labour has been systematically marginalised and pushed into informality, and why it matters for everyone.

What do marginalization and informalization mean? 🔗

Before diving deeper, let’s clarify two key terms. Marginalization, in the context of labour, refers to the process by which certain groups of workers – especially women – are pushed to the periphery of the economy. They are excluded from better-paying, secure, and formal jobs, and instead confined to low-status, low-income work with little bargaining power. Informalization refers to the growing trend of work being performed outside the regulated, formal economy. Informal work typically lacks written contracts, social security benefits, paid leave, and legal protections. When these two processes intersect – as they do for millions of women – the result is a deeply unequal labour market where women bear the brunt of economic insecurity.

The scale of women’s informal work 🔗

The numbers tell a stark story. According to available data, women working in the informal sector represent roughly 81.8% of all female employees. Meanwhile, data from the Periodic Labour Force Survey (PLFS) 2023-24 shows that about 61% of women workers in the non-agriculture sector are employed in informal sector enterprises. Women constitute over half of the 287 million registered unorganised workers on the e-Shram portal – approximately 151 million women.

Globally, the picture is not very different. The International Labour Organization (ILO) estimates that around two billion workers – about 61.2% of the world’s employed population – are in informal employment. While men have a slightly higher global rate of informality than women (63% versus 58%), the gender dynamics within informal work are far more telling. Women tend to be concentrated in the most precarious, lowest-paid segments of the informal economy – domestic work, home-based piece-rate labour, and unpaid family enterprise work.

How globalization fuelled informalization 🔗

Globalization promised prosperity for all. In reality, its benefits have been unevenly distributed, and women workers have often been on the losing end. As economies opened up and global supply chains expanded, competitive pressures pushed corporations to seek cheaper labour. This triggered a cascade of subcontracting, outsourcing, and decentralized production that moved work away from regulated factories into homes, small workshops, and the streets.

Research on changing employment patterns shows that women have been concentrated at the lowest tiers of these production chains, particularly in home-based work where labour protections are seldom enforced. The traditional insecurities of informal work have been made worse by the dynamics of globalization. Multinational firms may shift production across countries in search of ever-cheaper labour, and women in the informal economy often end up as the most vulnerable participants in these global value chains.

Studies on the gendered impacts of globalization further note that structural conditions within global production chains have made it extremely difficult for women workers to see any improvements in wages or working conditions. Labour markets remain highly segmented by gender, and women who lack formal contracts or social security have little leverage to negotiate better terms.

The subcontracting trap 🔗

A key mechanism through which informalization happens is subcontracting. Large firms reduce costs by breaking down production into smaller units, often outsourcing the most labour-intensive tasks to home-based workers. A woman stitching shoe uppers at home or packaging spices for an export company may be several layers removed from the brand that ultimately profits from her labour. She has no contract with that brand, no knowledge of the final selling price, and no power to demand fair pay. This layered structure makes exploitation easy and accountability nearly impossible.

Why women are overrepresented in informal work 🔗

The overrepresentation of women in informal work is not accidental. It is the outcome of deeply entrenched social norms, structural barriers, and policy failures working together.

The burden of caregiving 🔗

Women continue to bear a disproportionate share of domestic and caregiving responsibilities. The Economic Survey 2024 noted that women’s unpaid care work contributes an estimated 3.1% to the GDP – yet this labour generates no income or asset ownership for the women performing it. Because of these responsibilities, many women seek work that offers flexible hours and can be done from home, even if such work pays far less and offers no security. The informal sector becomes the default option, not a genuine choice.

Cultural barriers and occupational segregation 🔗

Cultural norms about what constitutes “appropriate” work for women further restrict their options. The ILO has observed that cultural barriers and occupational segregation play major roles in limiting women’s economic potential. Women tend to be clustered in industries and occupations that have not experienced significant employment or wage growth. The concentration of women in the informal sector is not primarily driven by legal barriers – women have equal rights to obtain jobs, sign contracts, and open bank accounts. Instead, it is social attitudes and stereotypes that keep them confined to certain types of work.

The reverse structural shift 🔗

An especially concerning trend is what some researchers have called a reverse structural shift. Instead of women moving from agriculture into higher-productivity manufacturing and service jobs – as typically happens during economic development – data shows the opposite occurring. The share of rural women in agriculture rose from 71.1% in 2018-19 to 76.9% in 2023-24, while their presence in the industrial and service sectors actually declined. This suggests that non-farm opportunities for women remain severely limited.

Working conditions in the informal sector 🔗

The informal sector is characterised by conditions that would be unacceptable in any regulated workplace. Low and irregular wages, long hours, hazardous environments, and zero social protection are the norm rather than the exception.

Wages far below the minimum 🔗

Research on home-based workers reveals startling wage disparities. On average, home-based workers earn only about one-fifth of the legal minimum wage in cities like Delhi, despite frequently working extended hours. In some trades, the pay is shockingly low – women engaged in tasks like almond peeling may earn as little as Rs. 50 for a job that takes twelve to sixteen hours. The piece-rate payment model, where workers are paid per unit of output rather than per hour, makes them particularly vulnerable to exploitation.

No social security net 🔗

The vast majority of female informal workers lack access to social security benefits such as health insurance, pensions, or maternity leave. Without formal employment contracts, there is no documentation of their work, which means they cannot access most government welfare programmes. Informal workers are also excluded from formal banking services, often pushing them towards exploitative moneylenders when they need credit.

Vulnerability to harassment 🔗

The lack of a formal employer-employee relationship also leaves women vulnerable to workplace harassment. An overwhelming majority of women workers in the informal sector report difficulty accessing legal mechanisms to report sexual harassment. The absence of official employment documentation, combined with fear of losing their livelihood and social stigma, creates a wall of silence around such issues.

Employers and the profit motive 🔗

It would be incomplete to discuss informalization without examining the role of employers and market forces. Businesses – both domestic and multinational – benefit enormously from informal labour arrangements. By outsourcing production to informal workers, companies avoid the costs associated with minimum wages, social security contributions, workplace safety standards, and employee benefits. The more layers of subcontracting that exist, the more insulated the company is from accountability.

This is not a side effect of globalization; it is a feature of how global supply chains are designed. The structuralist view of the informal economy, as discussed in ILO literature, holds that privileged actors in the formal economy actively seek to erode formal employment relations and subordinate informal workers in order to reduce labour costs and increase competitiveness. Women, who are already at a disadvantage due to social norms and caregiving responsibilities, are the easiest targets for such cost-cutting strategies.

The economic cost of ignoring women’s work 🔗

The marginalization of women’s labour is not just a social justice issue – it has enormous economic implications. Estimates suggest that the economy could grow by an additional 27% if women were represented in the formal economy at the same rate as men. When women’s work goes uncounted, undervalued, or unprotected, the entire economy suffers from lower productivity, reduced consumption, and persistent poverty cycles.

Official economic measurements compound the problem. Because much of women’s informal labour in markets, domestic service, garment work, and handicraft production is not captured by standard definitions of economic productivity, national accounts significantly underestimate women’s contributions. This invisibility in data then leads to invisibility in policy – if the work isn’t counted, it’s unlikely to be supported or protected.

Steps towards recognition and protection 🔗

Despite the grim picture, there are meaningful efforts underway to improve conditions for women in the informal economy.

Government initiatives 🔗

The e-Shram portal, launched as a national database for unorganised workers, is a significant step towards making informal workers visible. According to government data, social protection coverage has expanded notably in recent years, with the ILO’s World Social Protection Report 2024-26 noting a doubling of coverage from 24.4% to 48.8%. Schemes like the Atal Pension Yojana, with over 7 crore enrolments, and the PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) are attempts to bring some security to informal workers. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) also includes provisions for equal wages and childcare, providing an important safety net for rural women.

The SEWA model 🔗

Perhaps the most powerful example of grassroots action is the Self-Employed Women’s Association (SEWA), founded by Ela Bhatt in 1972 in Ahmedabad. Today, SEWA is the single largest women workers’ trade union, with over 3.7 million members across 20 states. SEWA’s approach treats the woman not just as a labourer but as a whole person – addressing needs related to income, healthcare, childcare, insurance, housing, and legal aid. Through cooperatives and self-help groups, SEWA members have built their own banking, healthcare, and childcare systems from the ground up, demonstrating that social security can be designed and owned by workers themselves when formal systems fail to include them.

SEWA’s cooperative model – including childcare cooperatives for factory and agricultural workers, healthcare collectives, and savings and credit institutions – offers a replicable framework for empowering informal women workers. Their campaigns for minimum income, collective bargaining on piece rates, and advocacy for policy change have been influential nationally and internationally.

International frameworks 🔗

At the global level, the ILO’s Recommendation 204 (2015) on the transition from the informal to the formal economy provides a comprehensive policy framework. It acknowledges that a large informal economy challenges workers’ rights and has negative effects on development. The Sustainable Development Goals also include a specific indicator on informal employment (SDG 8.3.1), bringing global attention to the issue.

What needs to change 🔗

Addressing the marginalization and informalization of women’s work requires action on multiple fronts. First, labour laws need to be extended to cover informal workers, including those in home-based and domestic work. Second, social protection systems must be redesigned to be portable, flexible, and accessible to workers without formal contracts. Third, investment in care infrastructure – affordable childcare, elderly care, and maternity support – is essential to free women from the forced trade-off between caregiving and livelihood. Fourth, data systems must be improved to accurately count and value women’s work, including unpaid domestic and care labour, so that policy can be properly informed. Finally, skilling and digital inclusion programmes tailored to women’s needs can open pathways into more productive and better-paid work.

None of these changes will happen without challenging the deep-rooted gender norms that assign women to caregiving roles and limit their mobility and aspirations. Policy must be accompanied by sustained efforts in education, media, and community engagement to shift attitudes about women’s work.

What do you think? 🔗

Given that informal women workers contribute so significantly to the economy, why do you think their work continues to remain invisible in most policy discussions? And can models like SEWA’s cooperative approach be scaled up effectively, or do we need entirely new frameworks to address the challenges of informalization in a rapidly changing economy?

References

1. https://www.changeincontent.com/women-workers-in-the-informal-sector-india/
2. https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2097693
3. https://www.ilo.org/publications/women-and-men-informal-economy-statistical-picture-third-edition
4. https://webapps.ilo.org/public/english/protection/ses/download/docs/gender.pdf
5. https://cdn.unrisd.org/assets/library/papers/pdf-files/dfid-overview.pdf
6. https://www.drishtiias.com/daily-updates/daily-news-analysis/female-labour-force-participation-in-india
7. https://www.cfr.org/womens-participation-in-global-economy/case-studies/india/
8. https://yipinstitute.org/capstone/invisible-labor-women-india-home-work
9. https://www.dandc.eu/en/article/union-informal-workers-how-does-work-more-50-years-women-india-have-been-supporting-each
10. https://www.sewa.org/about-us/
11. https://www.sewafederation.org/social-security-informal-women-workers/