#SCIENCE | Equilibrium in Markets: Cultivating Gender Equality
by Marla Alferez
The Nobel Prize in Economic Sciences was awarded to Claudia Goldin last October 9, making her the first woman to be the sole laureate of the prize in any year. Since the 1980s, Goldin has been publishing an influential body of work on economics focusing on the roots of changes in women’s employment, which “advanced our understanding of women’s labor market outcomes.”
Economic Growth vs. Gender Equality
Economists widely thought higher economic growth meant more women participating in the workforce. However, Goldin dismantled this assumption when she discovered that the number of employed women diminished during industrialization in the 19th century because women found it more challenging to work from home.
Goldin was able to refute this further when she identified a U-shaped curve between women’s labor participation and economic development. If gender equality was driven by economic growth, the trend should have been an upward slope curve.
Even though the expansion of clerical job opportunities invited more women into workplaces throughout the 20th century, their competence remained underutilized. Goldin associated this inefficiency with women underestimating their potential to excel in clerical work, partly because of the influence of their mothers who continued to stay at home even after their children had become independent. Women cut short their education due to a lack of confidence in securing a long stay in their careers, or overwhelming responsibilities at work and at home.
Crucial culprits: marriage and parenthood
Not that long ago, women were firmly dismissed from their jobs for being married, being pregnant, and having children. Moreover, the range of job choices they were given was also limited by federal agencies implementing laws that favored men.
These biases prevailed at the beginning of the 20th century, evident in the fact that only 5% of married women were employed because pre-existing legislation barred them from keeping their hard-earned wages.
Notably, during the Great Depression — perhaps the most severe economic crisis in modern history — the US government passed a federal law that prohibited both spouses from working simultaneously for the state, leading to companies firing their male employee’s wives. Despite being met with resistance and prejudice, some women hid their marriages and changed their surnames to save their jobs. Unfortunately, their aspirations to continue working were crushed by the federal government when it implemented even stricter laws that effectively banned them from federal service. These political barriers persisted until 1939, the year the Great Depression took its final bow.
Moving forward from these obstacles, the 1950s saw a turning point in gender disparities as the number of women employed steadily increased. Goldin attributed this shift to the introduction of birth control pills into motherhood, allowing women to delay childbirth and invest their time in their education and careers. Despite this advancement, inequality in the distribution of earnings between the two sexes continues to linger.
In an interview with The Associated Press, Goldin stated: “Women are now more educated than men. They graduate from college at much higher rates than men. They do better in high school than men do. So why are there these differences?”
The cause? Parenthood.
Once a woman bears a child, all of her priorities will suddenly shift to ensure her baby is in good condition, and this comes with having to take a break from work. On the other hand, men do not have to make these sacrifices. Additionally, since modern wage systems incentivize employees whose schedules are flexible and can work even on weekends, women cannot avail of these incentives because they shoulder more childcare responsibilities. To address this, Goldin suggested that couples need to have an equitable share of caregiving responsibilities.
These were the findings Goldin uncovered from examining past documents and applying industrial statistics. Economist Claudia Olivetti at Dartmouth College pointed out, “The strength of her work comes from combining careful and innovative historical data with insights from economic theories of wage determination, employment, discrimination, and the political economy.”
Empowering Revelations on Gender Dynamics
The process of untangling the unknown reasons behind gender dynamics in the world of economics became even more challenging when Goldin found out that women’s jobs were frequently belittled and therefore uncounted. Regardless, Goldin’s work revealed the driving forces behind the shifts in gender inequalities within labor markets over the years.
“Understanding women’s labor market participation is crucial for our understanding of society [and] equity. The work of Claudia Goldin is really instrumental in understanding some of these trends,” remarked economist Barbara Petrongolo of the University of Oxford.
By calling out legislative barriers, societal norms, and institutional biases that hinder women’s full participation in the workforce, Goldin’s findings have provided insights to policymakers to create more inclusive workplaces.
Goldin’s study acts as an eye-opener, shifting society’s paradigm that what needs to be done to remedy this economic inefficiency is to improve systems and cultures, and not women themselves.
*Note: The trends and ideas discussed are not applicable universally.
