On the morning of October 9th the National Bureau of Economic Research circulated a working paper to economists around the world entitled “Why Women Won”. In the paper, Claudia Goldin of Harvard University documents how women achieved equal rights in American workplaces and families. Rather fittingly, a few hours later, Ms Goldin was announced as the winner of this year’s economics Nobel prize for advancing “our understanding of women’s labour-market outcomes”.
Having been the first woman to be granted tenure at Harvard’s economics department, Ms Goldin is now the third woman to have won the subject’s Nobel prize. Taken together, her research provides a comprehensive history of gender labour-market inequality over the past 200 years. In telling this history, she has overturned a number of assumptions about both historical gender relations and what is required to achieve greater equality in the present day.
Before Ms Goldin’s work, economists had thought that economic growth led to a more level playing field. In fact, Ms Goldin has shown, the Industrial Revolution drove married women out of the labour force, as production moved from home to factory. In research published in 1990 she demonstrated that it was only in the 20th century, when service-sector jobs proliferated and high-school education developed, that the more familiar pattern emerged. The relationship between the size of Western economies and female-labour-force participation is U-shaped—a classic Goldin result.
Ms Goldin’s research has busted other myths, too. By employing time-use surveys and industrial data she has painstakingly filled in gaps in the historical record about women’s wages and employment. Straightforward statistics, such as the female employment rate, were mismeasured because women who, say, worked on a family farm were simply recorded as “wife”. For example, Ms Goldin found that the employment rate for white married women was 12.5% in 1890, nearly five times greater than previously thought.
Her calculations also showed that the gender wage gap narrowed in bursts. First, a drop from 1820 to 1850, then another from 1890 to 1930 and finally a collapse, from 40% in 1980 to 20% in 2005. What drove these bursts? The initial two came well before the equal-pay movement and were caused by changes in the labour market: first, during the Industrial Revolution; second, during a surge in white-collar employment for occupations like clerical work.
For the third and most substantial drop, in the late 20th century, Ms Goldin emphasised the role of expectations. If a young woman has more control over when and whether she will have a child, and more certainty about what types of jobs will be available, she can make more informed choices about the future and change her behaviour accordingly, such as by staying in school for longer. In work published in 2002 Ms Goldin and Lawrence Katz, her colleague and husband, detailed the example of the contraceptive pill, which was approved in 1960, and allowed women to have greater say over when and whether to have children. Between 1967 and 1979 the share of 20- and 21-year-old women who expected to be employed at the age of 35 jumped from 35% to 80%.
Expectations also matter for employers. Although the pay gap narrowed in the early 20th century, the portion of the gap that was driven by discrimination, rather than occupation, grew markedly. One important factor, according to Ms Goldin, was a change in how people were paid. Wages used to be based on contracts tied to tangible output—how many clothes were knitted, for instance. But after industrialisation, they were increasingly paid on a periodic basis, in part because measuring an individual’s output became trickier. As a result, other more ambiguous factors grew in importance, such as expectations of how long a worker would stay on the job. This penalised women, who were expected to quit when they had children.
Since around 2005 the wage gap has hardly budged. Here Ms Goldin’s work questions popular narratives that continue to blame wage discrimination. Instead, in a book published in 2021, called “Career and Family: Women’s Century-Long Journey Toward Equity”, Ms Goldin blames “greedy” jobs, such as being a lawyer or consultant, which offer increasing returns to long (and uncertain) hours.
She explains how such work interacts with the so-called parenthood penalty. Women spend more time raising children, which is why the gender pay gap tends to open up right after the first child arrives. The gap continues to widen even for women and men with the same education and in the same profession. Work by Ms Goldin in 2014 finds that the gender earnings gap within jobs has grown to be twice as important as the gap caused by men and women holding different jobs.
Ms Goldin’s research holds lessons for economists and policymakers. For the former group, it shows the importance of history. Her first book was about urban slavery in America’s South during the mid-1800s. In other well-known work, with Mr Katz, she has shown how the relationship between tech and education can explain inequality across the 20th century. Before Ms Goldin, many academics considered questions about historical gender pay gaps unanswerable owing to a paucity of data. She has demonstrated—again and again—that digging through historical archives allows researchers to credibly answer big questions previously thought beyond their reach.
For policymakers, her research shows that fixes for gender inequality vary depending on time and place. In early 20th-century America, firms barred married women from obtaining or retaining employment. A policy response came with the Civil Rights Act of 1964, which banned such behaviour. Today, wage gaps persist because of greedy jobs and parental norms, rather than because of employer discrimination. In the past, Ms Goldin has suggested more flexibility in the workplace could be a solution. Perhaps working out how to achieve that will be her next act. ■
Source: Finance - economist.com
