Social transition, economic development and gender-based wage disparity in a developing economy

A four-sector competitive general equilibrium model has been developed with both male and female labour in presence of capital market distortion to analyse the effect of social transition on female labour force participation and gender-based wage inequality. The analysis finds that although gender wage inequality worsens in the existing structure, the consequence on female participation in the workforce depends on the stage of social transition. While it falls in the early stages, it begins to rise once a certain critical level of transition is crossed. Finally, we have advocated in favour of a policy that can effectively speed up the process of social transition thereby gender empowerment.