The impact of Claudia Goldin’s work-Nobel Prize in Economics

Why in the News?

The Sveriges Riksbank Prize in Economic Sciences for 2023 by the Royal Swedish Academy of Sciences was awarded to Harvard University Professor Claudia Goldin.

• She was awarded for “having advanced our understanding of women’s labour market outcomes”.
• Her work “first comprehensive account of women’s earning and labour market participation through the centuries”. 
• Claudia Goldin is only the 3^rd women to have won the prize (for Economics) and the first to do it solo.

Claudia Goldin’s work:

1. Goldin demonstrated how and why gender differences in earnings and employment rates have changed over time, by analysing 200 years of the United States’ archives.
2. Significant observations from her work:
   1. Female participation in the labour market exhibited a U-shaped curve rather than an upward trend over the entire period.
   2. The economic growth occurring in varied periods did not translate to reducing gender differences in the labour market
   3. several factors that are influencing the supply and demand for female labour include:
      1. Opportunities for combining paid work and a family
      2. Decisions (and expectations) related to pursuing education and raising children
      3. Technical innovations
      4. Laws and norms
      5. Structural transformation in an economy.
   4. She highlighted that both men and women lose.
      1. “Men are able to have the family and step up because women step back in terms of their jobs, but both are deprived.”
      2. “Men forgo time with their family and women often forgo their career”.

How did female participation move between agrarian and industrial era?

1. The transition from an agrarian to an industrialised society witnessed decrease in participation of married women in the early 19^th century, primarily due to difficulty in balancing the demands of their family and work.
2. It started to increase again with the growth of the services sector in the early 19^th century. 

3. Her work laid out how female participation in labour force was incorrectly assessed and stated in Censuses and public data.

• For instance, women’s occupation is categorised as “wife” as a standard practice in records, which leaves out activities of women besides domestic labour, as working alongside husbands in farms or family businesses, in cottage industries or production setups at home, such as with textiles or dairy goods.

4. Her work claimed that there is no historical consistency between female engagement in the overall labour force and economic growth.

What made the curve move upwards?

1. An upward trajectory for female participation in the labour force was witnessed in the early 20^th century due to reasons such as,
   1. Technological progress
   2. Growth of the service sector
   3. Increased levels of education leading to increasing demand for more labour.
   4. However, social stigma, legislation and other institutional barriers limited their influence.
2. “Marriage bars”, the practice of firing and not hiring women once married, peaked during the 1930s’ Great Depression and the following years which prevented women from continuing as teachers or office workers. 
3. Prevalent expectations about future careers by women.
   1. In early 19^th century, women were expected to exit the labour force upon marriage, which led to underestimation of educational choices.
   2. But around 1970s, married women would return to the labour force once their children were older which meant a reliance on educational choices by women.
   3. Though there was a massive influx of women into the labour market in the late 19^th century, the above pointed contributed little to average employment level for women.
4. Another factor includes introduction of birth control pills which helped women to plan their careers better, though it did not influence earnings gap between men and women.
5. Pay discrimination increased significantly with the growth of the services sector in the 20^th century and expectations paradigm of preference to employees with “long and uninterrupted careers” were given.