The Nobel Prize in Economics
D. Indumathi, The Institute of Mathematical Sciences, Chennai

The Royal Swedish Academy of Sciences has decided to award the Sveriges
Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2023 to
Claudia Goldin,
Harvard University, Cambridge, MA, USA,
“for having advanced our understanding of women’s labour market outcomes”.

This year’s Laureate in the Economic Sciences, Claudia Goldin, won the prize for helping us to understand the labour markets over the last two hunderd years, and how women have contributed to it.
Women are vastly underrepresented in the global labour market and, when they work, they earn less than men. Claudia Goldin has collected over 200 years of data from the US, allowing her to demonstrate how and why gender differences in earnings and employment rates have changed over time.
Some of us may have thought that along with education, more and more women are entering the job market today. So, if you plot a graph of the percentage of married women who are working, you will expect it to improve over time. Surprisingly, Goldin showed that female participation in the labour market instead forms a U-shaped curve (see figure). Why did this happen? More women were working on the fields around their houses 200 years ago. As the industrial age began, women had to leave their homes to go to factories and so female participation decreased in the early nineteenth century. It then started to increase with the growth of the service sector in the early twentieth century.
Goldin explained this pattern as the result of changing social norms regarding women’s responsibilities for home and family.  She also showed that during the twentieth century, women’s education levels continuously increased, and in most high-income countries they are now substantially higher than for men. Goldin demonstrated that access to the contraceptive pill (family planning methods to delay or limit the number of children she has) played an important role by offering new opportunities for career planning.

In the early twentieth century, for example, most women were only expected to work for a few years prior to marriage and then to exit the labour market upon marriage.  Despite increasing numbers of employed women in the twentieth century, for a long period of time, men used to earn more than women, and this is so even today. Goldin showed this mostly arises with the birth of the first child. Because women often take greater responsibility than men for childcare, for example, this makes career progression and corresponding increase in earnings more difficult. This is called the parenthood effect and results in women earning less than men.

“Understanding women’s role in the labour is important for society.  Thanks to Claudia Goldin’s groundbreaking research we now know much more about the underlying factors and which barriers may need to be addressed in the future,” says Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences.

Source:
https://www.nobelprize.org/prizes/economic-sciences/2023/popular-information/