Harvard professor Claudia Goldin was awarded the Nobel Prize in Economics this past weekend for her extensive and groundbreaking research on women in the labor market over 200 years. She is only the third woman to be awarded this prize. Read on to learn about Goldin’s significant contribution to labor economics.

Claudia Goldin’s Research

The woman whose work explains why women are less likely to work than men worldwide, and when they do, why they earn less money, is just the third woman out of 93 Nobel Prize winners in economics. The fact that she was a sole winner (there are often 2-3 winners who contributed to the same body of research) is a testament to her contribution. No one had previously traced the history of women in the workforce, breaking down the drivers of their labor force participation, gender differences in education across time and job/career selection as well as the wage gap.

Jakob Svensson, chair of the committee for the prize in economic sciences, added: “Understanding women’s role in the labor market 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.” (CNN)

“She has done for the field of gender and the economy what the Beatles did for pop music,” Heggeness (Misty Heggeness, University of Kansas) said. “And her influence isn’t only felt among women.”

Before Goldin’s time, male labor economists usually excluded women in their analysis of the labor market, because women’s choices were “too complicated” to be put into economic models, she added. Goldin was one of the first to include women, and took the time to “disentangle the trends and the behaviors of women,” Heggeness said. (MarketWatch)

Claudia Goldin uncovered bias, discrimination and harassment through time, as you might expect, but there is so much more to the story of women in the workforce and barriers to equality. Over time, women evolved from having to choose between having a career or having a family to having one and then the other to being able to have both at the same time. Women have become more and more educated over time. Today, women have surpassed men in terms of educational attainment. Goldin connected the availability of birth control in the 1960s to the growth in women’s participation in professional (higher paying) fields. Despite all of this, the gender gap in pay actually widened in the 1980’s. Why?

Goldin normalized for all possible variables in identifying the reasons for the gender pay gap. She named the underlying phenomenon. It is the cost of “temporal flexibility.” In other words, women choose positions that allow more flexibility to be “on call” for anything that might arise on the home front. Men, on the other hand, have been paid premiums for taking the jobs that required them to be “on call” for work—extra hours, evening or weekend hours, availability to clients, etc. She further explains that the flip side of Gender Equity is “Couple Inequity,” which can also be true for same-sex couples. Typically, one party takes the salary hit in order to be able to pick up any slack at home, and historically, this has been the woman.

Goldin’s research helps identify potential solutions to the issue by making changes in the workplace. Structuring jobs and teams and the communication among them so that members can seamlessly substitute for one another might allow women to take the higher-paying jobs that have the “on-call” component.

Another interesting application of Goldin’s work is to understand what might happen to prospects for men’s careers and their salary potential as more of them become primary caregivers. Their numbers are growing.

During Covid, Goldin’s work pivoted. Her analysis of labor force participation and child-rearing responsibility during the pandemic showed a much harsher picture. Initially when schools and some businesses shut down, many women took a step back 100 years and could no longer have both a career and a family. But the new prevalence of working from home, conversely, may have helped women once schools reopened if they happened to be in a job where they could work from home.

As a labor economist, Goldin has also contributed to the economic literature on the economics of slavery in the Southern US as well as the impact of the Great Depression on education and technology. In addition to her significant body of research, Goldin’s legacy is further enhanced by her role as a mentor for many female economists in the field, and as a role model to even more. 

• Fun Fact: Goldin was the first woman to receive tenure in Harvard’s Economics Department.
• Fun Fact: the Economics prize is not funded by the same organization that funds the other Nobel prizes but by the central bank of Sweden, the Riksbank, in memory of Alfred Nobel, and was first awarded in 1968.

Lesson Ideas

One effective way to learn about Goldin’s work is to hear her explain it herself. There is a brief video (<2 minutes) of Goldin describing her work embedded in this AP article on the award. This could be used as a hook for a discussion of current events or as part of a lesson on labor economics.

The NBER (National Bureau of Economic Research) recorded her 2020 lecture (the 12^th annual Feldstein lecture) entitled “Journey Across a Century of Women.” As the title indicates, it covers the evolution of women in the workforce over the last century. While the article upon which the lecture is based uses pre-Covid data (it was published in 2020, and the lecture was given in July, 2020), Goldin ends her lecture with data from the Covid shutdown on changes in required childcare and the division of the extra work between spouses. The very end covers her projections about what will happen next.

The lecture is 40 minutes long and a bit academic (a little dry and Goldin sometimes describes her data and graphs using technical terms that students might not understand,) but students should still be able to understand her key findings. You could use the lecture as a basis for a project for students interested in labor economics, or use it as a sub plan with the addition of discussion questions. A printed version is also available.

Suggested Discussion Questions

1) Can you name at least one of the two technological (medical) advances during the period covered that have increased career options for women?

2) Do you know of any of your female relatives from the last few generations who had careers but not families?  Did you wonder why?

3) Looking at Figure 3 from Goldin’s lecture, can you explain why the pay gap is bigger for college educated women than for all women

4) Can you explain the “inflexibility premium (or cost)” in your own words?

5) Can you explain what couple inequality is in your own words?

6) What do you think of Goldin’s idea of creating a “Civilian College Corps?” Do you think it would have helped women during the pandemic? Would you have joined if you were not attending college or otherwise employed? Do you think this concept could be adapted for “normal times” in terms of supporting parents in the work force? If so, how do you think it might operate?

About the Author

Beth Tallman

Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.