Claudia Goldin

“I have always thought of myself as a detective”, said economic historian Claudia Goldin in an interview soon after being informed she had won the Nobel Prize for Economic Studies. “I do my detective work with archival documents, with large amounts of data. The point of being a detective means that you have a question. And the question is so important that you will go to any end to find an answer.”

The question that Claudia Goldin set out to answer was women’s participation in the labour force, how it has changed with time and the factors that determine it. At the time when Goldin started her research, it was assumed that there was a positive co-relation between economic growth and women’s participation in the workplace. By examining historical data, she found that labour force participation actually dropped drastically after the Industrial Revolution when workplaces shifted from the home (or close to the home) to factories.

By comparing labour force participation for different cohorts of women, Goldin confirmed what was already known- that even when women entered the labour force, they dropped out after marriage and childbirth. Further, she found that when women tried to re-enter the labour market after their children were grown up, their options were restricted by educational choices they had made 2 decades previously. This, she showed is a vicious cycle, because educational decisions are taken assuming that women will not work after childbirth, and the same decisions later prevent them from participating in the labour market.

Claudia Goldin correctly identified the easy availability of contraceptive pills as one of the major reasons behind the entry of women into professions like law, medicine and economics that required extensive professional training. However, here too, she identified a distinct wage gap between men and women of similar age, education and productivity, which she explained as being on account of the fact that salaries are often determined based on the perception of how long a particular employee would remain with the firm. Since it was assumed that women would drop out after childbirth, salaries for women were pegged lower than those for men. Even women who continue to work after childbirth lose out on both career progression and earnings, because greater responsibilities at home make it hard for them to be constantly available and flexible to the demands of the employer.

Though Goldin does not offer any solutions, in the words of economist Randi Hjalmarsson, a member of the Prize Committee, “her research allows policymakers to tackle the entrenched problem.”

The Nobel Prize is awarded for big ideas and for long-term change. By awarding the Nobel Prize to Claudia Goldin, the Royal Swedish Academy of Sciences has put gender inequity in the labour market in the spotlight. The first solo female winner of the Nobel Prize for Economic Science has identified the obstacles to gender equity. It is now upto policy makers and corporates to remove them, so women’s labour is finally acknowledged and rewarded.