Goldin’s Nobel is a wake-up call on women’s work participation
- Governments should promote gender empowerment and optimal utilization of human resources
Claudia Goldin’s work that earned her the Economics Nobel Prize is quite ironical. The subject is women in labour markets and gender equality. The irony is that ever since the prize was instituted for this discipline in 1969, only two women have won it: Elinor Ostrom in 2009 and Esther Duflo in 2019. Professor Goldin has been awarded for her insights on the success of women in the labour market, whose trends and patterns she analysed. This is timely, as ending gender discrimination is a primary goal for policymakers across the world.
A lot of resources are spent on furthering education among girls. However, this does not ensure that they join the labour force effectively. Some drop off mid-career. Many face some form of discrimination. This is a universal story and Goldin has shown that gender gaps will not necessarily close with economic development, as lacunae exist in several economies. Hence, economic growth does not always improve labour market outcomes for women.
What needs to change first are social norms that act as barriers, especially in conservative societies. Tradition may come in the way of girls studying ‘too much’ or even taking up jobs after a complete education. It has been observed that as Western economies evolved to reach ‘developed economy’ status, the proportion of women in their labour force went up, but the same does not hold for countries in Asia and Africa.
The second point is that as America transitioned from an agrarian to industrial society, women’s labour participation rate first dropped and then rose as the US economy became more services oriented. After the industrial revolution set in, family responsibilities were split on the premise that industrial jobs required hard work where conditions were not hospitable for women. Hence, until laws came in for firms to provide welfare and safety, jobs gravitated to men. This changed when services began to grow and women got more work opportunities. Here, Goldin has emphasized the role played by the contraceptive pill, which helped women keep jobs after marriage.
The third issue is of gender gaps in terms of pay. This has historically held across all sectors, with breaks taken for childbirth marking points of divergence for women. Such breaks in career have been responsible for restricting upward mobility for women, widening pay gaps.
Here, Goldin highlights the role of expectations. Women have tended to be more ambitious in the last few decades with ‘role models’ playing a major part. Earlier expectations were often anchored by the working patterns of earlier generations, whose women did not go back to work after childbirth. Closing the gap in pay with men tended to be slow. Opportunities have gone up since, with employers looking for gender diversity, which has helped raised the bar of expectations. This can be seen even in India and it is a positive sign.
Fifth, an interesting conclusion that she has drawn from her research is that while change is taking place at a fairly rapid pace, especially in rich countries, it is more among younger cohorts. This means we can expect further generational shifts over the next few years.
Are there lessons for governments here? The starting point is to make gender equality a priority. Education for girls is a necessary condition. Cash incentives can help, just as the mid-day meal scheme worked in several states.
Next, a congenial environment needs to be provided to ensure that women can work effectively in all fields: from agriculture and mines to manufacturing and services. Provisions for work-hour limits and maternity leave for women (up to 26 weeks) already exist. Factories must necessarily provide crèche facilities so that childbirth does not result in women leaving the workforce. Private sector investment in child care centres will surely help.
The covid pandemic has opened the door to alternative ways of working, and ‘work from home’ can be something offered to women staff to ensure that they can work for long periods of time without a break. Often, even highly qualified women leave the workforce never to return (at least to the same career). This needs a pushback.
Last, several professions have been virtually reserved for men, given the security considerations. This relates to low-paid services like food delivery or public transport driving; both remain male bastions. State governments must act to create an enabling environment for women to work safely in various roles and gain financial independence.
Can affirmative action help? The answer is ‘yes’. The Securities and Exchange Board of India, for instance, made it mandatory for companies to have at least one woman director on their boards. A similar move can be considered for women in top management, so that they become role models for other working women. Lower tax rates for women up to a certain threshold of income level can also be an incentive.
The Nobel Prize award to Claudia Goldin should be viewed more as a wake-up call for governments to look at ways of improving women’s participation in labour markets. This will help not just from the perspective of bringing about diversity and gender empowerment, but also optimal utilization of human resources.
