The Effect of Structural Adjustment Policies on Women’s Employment and Well-being

In 1991, India faced a severe balance of payments crisis and turned to the World Bank and the International Monetary Fund (IMF) for support. The loans came with conditions: restructure the economy, open it to global markets, and shrink the role of the state. These conditions formed the core of Structural Adjustment Policies (SAPs). On paper, they were gender-neutral economic reforms aimed at stabilising the economy. In practice, their effects fell unevenly across society, and women from poor households absorbed a large share of the cost. This post examines how SAPs reshaped women’s employment and well-being, and why so many ended up worse off even as headline economic indicators improved.

What are Structural Adjustment Policies? 🔗

Structural Adjustment Policies are economic reform packages designed by the World Bank and the IMF, usually offered to countries facing debt crises in exchange for financial assistance. A typical SAP package includes government spending cuts, privatisation of public enterprises, trade liberalisation, currency devaluation, and the removal of subsidies on basic goods. The logic is that freer markets and a smaller state will boost efficiency and long-term growth.

India’s reform strategy launched in July 1991 combined macroeconomic stabilisation with structural adjustment. The New Economic Policy of 1991 included devaluation of the rupee, higher interest rates, cuts in public investment and expenditure, and reductions in food and fertiliser subsidies. These measures were presented as essential medicine for a sick economy. But as researchers have pointed out, the design of SAPs almost entirely ignored the welfare dimension, and especially the differing impact on men and women.

Why a “gender-neutral” policy is not gender-neutral in practice 🔗

The key insight from feminist economics is that economic policy treated as gender-blind is rarely gender-neutral in its results. SAPs were built on the assumption that the burden of social services could be quietly shifted from the state to the household. But the household is not a neutral space. When the state withdraws, the unpaid work of caring for children, the sick, and the elderly does not disappear. It is transferred to women within the family, whose dual role in both production and reproduction was largely negated in policy-making. This is why the same policy package can look efficient on a spreadsheet and harmful on the ground.

The macroeconomic promise versus the employment reality 🔗

Supporters of liberalisation argue that opening up the economy creates jobs and raises incomes. Some sectors did boom. The 1991 reforms focused primarily on the formal sector, and industries such as telecommunications and civil aviation grew rapidly after deregulation. Yet the gains were narrow. The informal sector, where the urban poor, agricultural workers, and small enterprises are concentrated, saw far slower progress.

This matters enormously for women. The decision-making during the 1991 reforms was dominated by men, and the sectors that benefited most from liberalisation were male-dominated. So even when the economy grew, the growth did not translate into secure, well-paid employment for women. Economist Jayati Ghosh has warned against celebrating productivity growth without examining who actually benefits, noting that capital-biased technological change frequently produces jobless growth and disproportionately displaces women, particularly in the labour-intensive sectors where they predominantly work.

Public sector cuts hit women first 🔗

One of the most direct effects of structural adjustment was the shrinking of public sector employment. Before the reforms, government jobs were a critical source of formal, protected work for women. The public sector typically offered better job security, more gender parity in hiring, and benefits like maternity leave than private employers.

Women were also disproportionately represented in government jobs. Public agencies were less able to discriminate on the basis of sex, and the more predictable hours fit alongside heavy domestic responsibilities. So when SAPs forced public sector contraction, the cutbacks were likely to affect female workers disproportionately. Retrenchment concentrated in sectors where women clustered, such as community, social, and personal services. With very little new job creation to absorb them, retrenched women had few formal alternatives.

The feminization of the workforce 🔗

As formal opportunities shrank, a striking trend emerged across developing economies, including India: the feminization of the workforce. This term describes the growing share of women in paid work, but it carries a sting. The jobs increasingly available to women were not the secure, dignified positions that the word “employment” might suggest. They were low-paid, insecure, and informal.

In India’s informal manufacturing sector, studies have documented a marked trend toward feminisation alongside widespread casualisation of work. Women’s share of employment rose in non-traditional sectors even as their position remained highly vulnerable, with widespread discrimination especially in the informal economy. The pattern follows a clear economic logic that researchers studying liberalisation elsewhere have identified: keeping wages low and maintaining a flexible labour force that can be hired in busy periods and dismissed in slow ones. Informal women workers became, in effect, the shock absorbers of a globalising economy.

Pushed into the informal sector 🔗

When the reforms cut agricultural subsidies, the consequences rippled into rural households. Many women shifted from agriculture into urban, informal-sector work as formal opportunities narrowed. The agriculture sector, which witnessed the highest disruption after 1991, has nonetheless remained a fallback option for women when no better work is available, illustrating how limited their choices became.

Informal work means no written contract, no social protection, no pension, and no legal recourse when wages are withheld. A worker in this sector can be dismissed without notice and has almost no bargaining power. For women already disadvantaged within the household in terms of education and access to resources, informalisation deepened existing inequalities rather than offering an escape from them.

Lower job quality even where jobs grew 🔗

It would be misleading to say women simply lost work everywhere. Export-oriented industries, such as garment manufacturing in some economies, did absorb large numbers of women. But these gains have to be weighed against lower job quality, lower wages, and weaker occupational safety in such export-led industries. A job that pays poorly and endangers health is a precarious foundation for genuine economic empowerment. The headline figure of “more women working” hides the deterioration in the quality of that work.

The hidden cost: rising unpaid labour 🔗

The damage to women’s well-being went beyond paid employment. Structural adjustment, by design, reduced government spending on social services. SAP conditionalities frequently brought widespread cuts in public spending on health and education in order to free up resources for servicing debt.

When public health clinics close or charge fees, and when schools become less accessible, the care that the state once provided does not vanish. It falls back on the family, and within the family, primarily on women. This is the mechanism behind what scholars call the double burden: the combined load of paid work and significant unpaid domestic and care labour. A woman pushed into informal employment to make ends meet still returns home to cook, clean, fetch water, and nurse sick relatives, with even fewer public services to lean on.

Care work made invisible 🔗

The economic value of this unpaid work is enormous yet routinely ignored. By some estimates, the value of unpaid domestic and care work in India falls between 15 and 17 percent of GDP, while the country spends less than one percent of GDP on care sectors. As Jayati Ghosh has documented, reduced social expenditure places a larger care burden on women, and the degradation or privatisation of common resources such as water and fuel increases the time they spend on essential household chores. International agencies echo this: when governments cut spending, the costs do not disappear but are transferred into unpaid care work and household survival strategies, and cuts to services hit women first and hardest.

Why women and children bear the heaviest load 🔗

The combined effect of these changes is that economic vulnerability concentrated among women and children from poor families. Three forces worked together. First, formal, secure jobs in the organised sector shrank, removing a ladder out of poverty. Second, the informal sector expanded, offering only low-paid and insecure work. Third, cuts to public services increased the unpaid workload at home. A poor woman therefore faced falling income security and rising domestic responsibility at the same time.

Children are affected through their mothers. When a household’s income falls and a mother’s time is stretched thin, children’s nutrition, schooling, and health can all suffer. The withdrawal of food subsidies and the rising cost of basic necessities such as water and electricity squeeze household budgets precisely where they are tightest. In this way, the welfare costs that SAPs ignored at the design stage reappeared in the everyday lives of the poorest families.

Were there any counterweights? 🔗

It is worth acknowledging that the picture is not uniformly bleak. In some contexts, targeted interventions softened the blow. Micro-credit programmes run by institutions such as the Grameen Bank and various NGOs made a real difference by expanding income opportunities for women through self-employment. These initiatives show that policy choices matter and that the harms of adjustment were not inevitable. Where states and civil society deliberately built support for women, outcomes improved. The problem was that such measures were the exception rather than a built-in feature of structural adjustment itself.

The bigger lesson for development policy 🔗

The experience of SAPs offers a lasting lesson for how we think about economic reform. Growth measured only through aggregate indicators like GDP can conceal deep distributional damage. A policy can improve a country’s balance sheet while worsening the daily reality for millions of working women. The failure was not merely technical but conceptual: economic models treated the unpaid care economy as if it could absorb unlimited shocks at no cost. Recognising care work as a public good and a foundation of the economy, rather than a private duty owed for free by women, is now central to debates on economic justice. Any future reform that overlooks this risks repeating the same mistakes under a new name.

What do you think? Should economic reform packages be required to include a formal gender impact assessment before they are adopted? And if the unpaid care work women perform is worth roughly a sixth of GDP, how should a country account for it when measuring economic success?

References

1. http://indiabefore91.in/1991-economic-reforms
2. https://www.tandfonline.com/doi/abs/10.1080/135457000750020155
3. https://www.sciencedirect.com/science/article/abs/pii/S0277539599000357
4. https://unacademy.com/content/ssc/study-material/indian-economy/economic-reforms-since-1991/
5. https://www.smu.edu/-/media/site/cox/centersandinstitutes/bridwellinstitute/research/working-papers—may-2024/rajagopalan-and-shah-working-paper.pdf
6. https://www.boeckler.de/data/downloads/OEA/Veranstaltungen/2025/v_2025_10_24_choudhury.pdf
7. https://socio.health/women-in-economy/structural-adjustment-womens-work-developing-world/
8. https://www.sciencedirect.com/science/article/abs/pii/0305750X95000225
9. https://ideas.repec.org/p/pra/mprapa/4873.html
10. https://ideas.repec.org/p/col/000118/003784.html
11. https://ideas.repec.org/a/taf/femeco/v6y2000i3p105-122.html
12. https://ideas.repec.org/a/spr/ijlaec/v67y2024i3d10.1007_s41027-024-00512-6.html
13. http://www.saprin.org/bangladesh/research/ban_gender.pdf
14. https://www.sciencedirect.com/science/article/abs/pii/027795369600127X
15. https://en.wikipedia.org/wiki/Double_burden
16. https://behanbox.com/2026/03/17/why-indias-budget-fails-to-recognise-care-work/
17. https://www.icrw.org/wd2026-developing-a-strategic-roadmap-for-economic-justice-across-global-policy-moments/