“Our understanding of women’s labor market

outcomes”
The Nobel prize in Economic Sciences, officially known as the Sveriges
Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is an
economics award administered by the Nobel Foundation.

This year Claudia Goldin, a Harvard University professor, has received

the Nobel prize in Economics for her research work on Gender
inequality that has been prevailing in the labor market from the past so
many years. Her research work has overturned several assumptions
and made apparent the causes as well as the main source of this
persisting gender gap. Ms Goldin is now the third woman to have won
the subject’s Nobel Prize.

Starting with the historical evidences and by looking back in the data
over the past 200 years, Claudia was able to have a good insight into
the differences that are faced by women in the labor market. Our
society has experienced several changes throughout the years in
different spheres like political, social and technological. It was easily
believed that with an expanding economic growth, participation of
women in the labor market is also increasing. But when thorough
research was done by Claudia about the changed economic structure
from agrarian to contemporary one, many new patterns came into
picture.

The first observation made by Claudia was that the women’s

employment rates had often been incorrectly stated in data by
referring their occupation to be as WIFE. However, by uncovering the
data it was revealed that women used to work alongside their male
counterparts in agriculture or various forms of family business.
Statistical data underestimated the contribution of women workforce.
However, by compiling new databases Goldin was able to have access
to correct data that presented higher proportion of women in labor
force than in the official statistics.

Moreover, it was found that women used to participate more in the

labor force prior to the industrialization phase. This happened mainly
because it was hard for married women to keep a balance between
household chores and industrial work. So even though many women
were employed in manufacturing the total female workforce declined
rapidly.

Marriage became one the significant factors that contributed to a slow

progression of equality in labor force. While around 20% of women
used to work, only 4% were married ones. Marriage bars often
prevented married women from continuing their employment. They
were excluded from parts of the labor market though it is not correct to
assume that if a woman is married she cannot perform any work other
than domestic labor.

Future expectations also influenced educational choices so women

made decisions about their education based on the expectation that
they are only required working for a brief period of time before their
marriage. On the other hand, during the second half of the twentieth
century societal norms changed allowing married women to return to
labor force after raising their children but for much of the twentieth
century women had underestimated their working years. This extended
period after marriage where women left their jobs also explains why
there was a low level of increase in participation of women in the labor
force.

A dramatic change occurred in the 1960s when new innovations in

industries and increasing levels of education were already influencing
women’s level of employment. By the end of the twentieth century,
contraceptive pills were introduced in the markets. Claudia justly
mentioned this as the ‘Power of the Pill’ since this gave women
independent control over family planning resulting in delaying
marriages and incentivized them to invest in their careers and
education.

From the above mentioned factors, Goldin was able to provide a

glimpse of the pattern of female participation in the labor market that
contradicted the previous claims and showed a U-shaped curve where
women participation decreased with the evolution from an agrarian to
an industrial society but then started to increase with the growth of the
service sector in the early twentieth century.

Ever after significant changes, the earning gaps did not disappear
completely. Though, it can be seen that the gender gap reduced after
the industrial revolution but the increased levels of pay discrimination
cannot be ignored. This majorly happened due to a change from
piecework contracts to pay system based on a monthly wage where
employees with long and uninterrupted careers were benefitted.

What is even deplorable is that in high-income countries that have

equal pay legislation, the earning gap between men and women is
significant even though most women are more educated than men.
Goldin has referred through her research that Parenthood is a key
factor for such a behavior. As women have to take the hard task of
combining both work and childcare at the same time, that is why they
are unable to be constantly available making it challenging for them to
maintain a career.

To conclude, we can say that Goldin has provided us with an overview

of the factors that affect women’s opportunity in the labor market and
how they are limited by marriage as well as the responsibility of the
home. The research showed that only advancements in information,
education or legislation is not enough, it is also required to know why
these differences exists. Claudia’s research has given us a better
understanding of the labor markets of yesterday, today and tomorrow.