The influence of Claudia Goldin – 10/23/2023 – Cecilia Machado

This year’s Nobel Prize in Economics recognized the importance of Claudia Goldin’s studies in explaining the historical evolution of women’s participation in the labor market. While only one in three women entered the workforce after World War II, today more than two in three do.

Goldin has produced, throughout her career, numerous articles combining innovative data and good empirical methodology to analyze differences between genders in the job market. Her work is capable of explaining the enormous transformation we have observed in the employment and career paths of women from different generations, and the real reasons why we have not yet achieved full salary equivalence between men and women today.

The economist paved the way to debunk several myths related to the low representation of women in positions that pay higher salaries, such as explanations that attribute weight to the different educational and occupational choices that people make throughout their lives. In her work, she shows that there was convergence in educational investments and occupational choices between genders, but that this is only part of the story.

The contraceptive pill, and its use among young women in the 1970s, for example, is an important factor behind the convergence of choices. By reducing investment costs in professional education —those that require longer dedication, such as in the careers of doctors and lawyers— the pill allowed women to have an active sex life without the risk of pregnancy.

It was through this technology that marriage and motherhood became dissociated from sex. The “power of the pill” has resulted in an increase in women pursuing professional careers and an increase in the age at which they get married, delegating to women the decision of when they get married, when they want to have children and what careers they want to pursue.

Today, women already surpass men in terms of education, and despite choosing similar occupations to men, we still see that the salary difference persists even when we compare men and women in the same occupation.

Motherhood again appears among the explanations. Differences in career breaks and hours worked —which are largely associated with motherhood—compose the reasons for the divergence between men and women who have made the same educational investments and career choices.

In a study that follows the professional trajectory of MBA students in the United States, Goldin shows that men earn more than women in the same class ten years after graduation, despite the difference being close to zero once they finish the MBA. This is why, in Goldin’s words, it is not possible to have equality in the job market as long as there is no equality between couples.

Understanding the past is important to outline the future, and Goldin’s most recent studies are being able to point out paths towards an environment of greater equality between genders in the job market, in solutions that do not necessarily involve public authorities saying how much may or may not pay for men and women performing the same role.

Goldin showed that it is difficult to infer discriminatory behavior on the part of companies, and that, although discrimination exists, inequality between genders is a much more complex phenomenon that also responds to social norms and the functioning of the labor market.

It is known, for example, that more flexible or part-time jobs pay disproportionately less per hour than in an employment contract where many hours are offered, or when the worker is always available for tasks that are less predictable. As women demand more flexibility in their working hours, Goldin shows that technological advances that increase substitution between workers reduce the penalty of part-time work and contribute to reducing the gender wage gap.

Goldin was the third woman to win the Nobel Prize, being the first to win it alone, in addition to being the first woman promoted to the position of full professor in the economics department at Harvard University. Recognition of the importance of Goldin’s work gains even more relevance when it is noted that in Goldin’s profession, women account for only 33% of assistant professor positions, 27% in associate professor positions, and 18% in full professor positions.

The Nobel for Claudia Goldin is a double victory: not only did she produce research of solid academic relevance for the award, but she was able to become a symbol of excellence in a field still largely dominated by men.

The book “Career and Family” is a great read for those who want to know a little more about Claudia Goldin’s work.

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