Nobel Laureate Claudia’s Work Relevant to India

Anjan Roy

Ukraine war and more immediately the Hamas-Israeli conflict had driven many things from out of the public view. One of these is the Nobel Prize in Economics in this year to a not widely known academic.

Claudia Goldin is only the third woman to get a Nobel prize in economics. That itself is a measure of what Goldin had pursued all her life to find out — gender gaps in pay and why women were being paid less than men over their career.

Ironically enough, the prize came to Claudia Goldin the same day that America’s National Bureau of Economic Research, one of the most fruitful platforms where the latest and the most significant researches into the discipline are often presented. The NBER had that day released a paper by Claudia Goldin titled “Why Women Won”. The Nobel had come to her shortly thereafter.

If you want to be impish, you might as well say Claudia Goldin’s life revolved around the contraceptive pill and in defining greed in an economists way. She was interested in many other topics before arriving at her life-time vocation: why women fell behind in their income or career compared to men who were equally capable.

In doing this, she did not just put up some intellectual construction with elaborate and so-called rigorous proofs to explain the phenomenon. She dug deep into economic history to find out the reasons. In her treatment, history and archival research turned out to be like the work of the detective. Her husband, who is also her intellectual colleague, referred to her capacity for digging out historical facts where others had simply given up.

In this she was the treading the path of Robert Fogel, her doctoral supervisor who had developed the use of the historical method in economics like no one really had sought earlier. Until then, the economic history mostly meant the story of the development of countries and nations like conventional historical chronicle.

Additionally, there were admittedly some scholarly work which had sought to understand the phenomenon of some countries achieving quantum leaps in development compared with laggards who were struggling despite similar kind of circumstances and resources.

But in Goldin’s hands it was different. She had intuitively come to an understanding that the conceptive pill was a major factor in deterring women’s participation in the labour market and the career path for women. However, she wanted a concrete sort of proof of the hypothesis and the factors which influenced these. Let us try to understand this in simple terms.

She thought of finding out the availability of contraceptive pills to women. In many of the states of America contraceptive pills were not available to women under the laws. When things started changing in this respect, she found that the states where the pill was easily available women participation in labour market was higher.

More significantly, the career paths of women in the liberal states were qualitatively better than in those where these were not easily available. Over years, she studied the historical facts of women gender pay gap as well as their employment levels and came to the conclusion that the pill made the difference.

The availability of the pill had made the difference to the expectations of women about their future career. When the pill was available, women could optimistically plan for a longer career and more paying one while at the same time hoping to start a family with kids in future. They could thus decide on “investing” a few more years in a “law course or a medicine degree” than would have been otherwise.

This is a decision on marrying later and postponing having kids in a near future and concentrate on career objective in the present. She had given examples. Consider a woman who is equally brilliant as her husband. Both can join a law firm and work for several more years when the woman could get a better and higher paid job as the husband. This the pill had made possible, as otherwise a boyfriend in college would have resulted in a family much earlier.

Now comes Claudia Goldin’s other concept — that of “greedy” jobs to explain gender pay gaps or women might land in a worse paying jobs than a man. A couple, both being equally brilliant, joins high-paying consultancy jobs or some service sector ones like law firm or medicine. There comes a point when they realise that for the sake of raising children it might become difficult for both to contuse with the same demanding jobs, paying higher salaries. One has to go for a less demanding career to devote to children.

The reason this happens is because in many of the quality jobs, pay is influenced by the time spent in office or devoted to the work. Hence, if one decides to opt for a less demanding role, will suffer over the career path in overall pay. One of the couple has to stay in the high paying demanding job while the other opts out. These jobs Goldin described as the “greedy” jobs. The pay shortfall is not necessarily a discrimination by the employer but a result of the choice.

Goldin’s findings are the result of a life time devoted to historical data mining and archival work on aspects which are not plain in the first place. She had studied the phases of women employment and found out how the dynamics worked out. She had come to her famous “U” shaped women employment curve.

That “U” happened because of the change in the organisation of production. She pointed out the loss of employment and women participation following industrial revolution. This was because with industrial organisation, productive units shifted away from homes and organised in large industrial areas. At home, women could very well participate in the production and business which she could no longer pursue when it was moved away.

Goldin through her rigorous studies of women employment figures found phases when women employment spurt compared with those when these lagged.

Claudia Goldin’s work has particular relevance for India at the current stage of our development. Soon enough, the sweet spot of having a bulge of working age population will be over. Increasing participation of women in the jobs market, particularly in high quality areas where skilled talents will be needed, India should have more women come forward to work. Goldin’s wisdom would be invaluable for Indian policy makers to woo women out of their confines in participate in the nation’s development. (IPA )