This last weekend, the 2023 Nobel Prize winners for Peace, Literature, Chemistry, Physics, Medicine, and Economics all received prizes commemorating Alfred Nobel’s death on December 10th. While not technically one of the main categories envisioned by the late scientist, the Prize for Economics is a memorial prize paid for not out of Alred’s estate but a Swedish bank. Regardless of the validity of the actual Nobel, the prize has acted as an esteemed Prize in economics, given to the likes of Milton Freidman, his protege Robert Fogel, and now the 77-year-old Harvard economist and historian Claudia Goldin. Goldin is not only a protege of Robert Fogel, continuing the legacy of Nobel prize winners, but she is also the third-ever female recipient of the Prize for Economics. Goldin’s research focuses primarily on monitoring women’s historical progress and setbacks in the workforce.
In particular, Goldin’s publication A Grand Gender Convergence: Its Last Chapter is directly responsible for winning her the Nobel Prize. This fascinating paper, published in 2014, tracks the historical convergence of the gender wage gap from the 1790s to today. Using her background in labor economics and history, Goldin showed with remarkable detail the convergence we see today in how much women are being paid and explanations for the present inequalities persisting in today’s age.
Goldin’s paper contends that women’s labor participation in the market is deeply tied to the relationship between home and the workforce. As women have historically played a role in childcare and housework, a woman’s ability to produce household income has been unfortunately tied to her social burden of childcare and housework. In the 1970s, when work was predominantly agricultural or cottage industry-based, 60% of married women were employed.
However, with the ushering in of the Industrial Revolution, work shifted away from home, significantly lowering the measured participation of married women in the workforce. However, with the rise of the service industry, Women’s rights movements, and most notably, the advantage of birth control and contraceptives, married women were slowly put back into the workforce, In part due to their newfound autonomy, changing social roles, and access to higher education.
As noted at the beginning of Goldin’s Nobel Lecture, women are now at the center of the workforce in most nations. In most developed nations, women are employed in the workforce from anywhere between 72 and 100%. Yet, still, these inequalities between men and women persist today through what is often referred to as the gender pay gap. As Goldin points out in her paper, since the 1970s, there have been calls to remedy this issue, often quantified as existing between 55 to 77 cents made on every man’s dollar. Today, this argument is often disputed with arguments about temperaments, time off, and laziness. Goldin finds that while the gender pay gap has largely closed, the gap largely occurs after women start to have children. As jobs today are, in fact, more and more based on seniority rather than performance, women are at a social disadvantage if and when they want to bear children. As their social role dictates, they take time away from their work to do necessary childcare; the time they spend climbing the hierarchy decreases compared to their male counterparts.
Goldin’s work is a perfect example of the valuable ability of economics to navigate complex politcal subjects. Rather than looking at the political reasoning for one side or another in the debate, Goldin sees that women’s equal participation in the market increases inefficiency overall. Goldin points to the shift away from the office as a possible force of convergence in the labor market, as it allows women to care for their children and continue work, increasing market efficiency and incentivizing female employment. It is, of course, no shock that her work won the Nobel Prize as it captures relevant current issues spectacularly, concisely, and systematically.