The Nobel economics prize: to whom and for what?

Claudia Goldin is an outstanding economist: in addition to teaching at various American universities, she was also the director of the US Economic Development Program in National Bureau of Economic Research (NBER) and chaired the American Economic Association. She is a member of the National Academy of Sciences, the Econometric Society and other scientific organizations. Her research examines the relationships between gender and economic development. Claudia Goldin has dedicated her life to studying gender inequality and fighting for equality. The economist’s main merit lies in the fact that she was able to express in one work what thousands of people could not do: to formulate the basic postulates and factors that ensure qualitative differences in the professional development of women and men. It is also worth noting that Claudia Goldin became the first woman to teach in the economics department at Harvard.

The Nobel Prize was awarded to the scientist for her work “Understanding the Gender Gap: An Economic History of American Women", which shows the reasons why women experience difficulties in building their careers. The study is based on a detailed analysis of statistical data with which Claudia Goldin identifies difficulties in employment, wages and career advancement for women compared to men over a long period of time.

Figure 1. U-shaped curve of women's labor market participation

Source: The Nobel Prize press release (2023)

The author's research highlights gender differences in labor market behavior and labor valuation over a very long period (about 250 years). The economist showed that women's labor force participation did not trend upward throughout this period, but instead formed a U-shaped curve (see Figure 1). Married women's participation decreased with the transition from agrarian to industrial societies in the early 19th century, but then began to increase with the growth of the service sector in the early 20th century. Goldin explained this pattern as a result of structural changes and the development of social norms regarding women's responsibilities in the home and family. Just a few decades ago, it was considered absolutely normal to fire or demote a woman for being married or about to get married, pregnant or having children. Women had different rights compared to men in the field of pensions or social security, were forced to use their husband’s name on bank/credit cards, and had restrictions on engaging in certain types of activities. With the expansion of women's rights, women's career opportunities have also increased, but gender inequality in various areas is still relevant.

In addition to including generally accepted factors in the model, such as education and prohibitions on engaging in certain activities, Goldin also included non-standard factors in the work. For example, such reasons comprise fashion or the biological nature of women - the ability to bear children. As a result of the analysis, the author came to the conclusion that the most obvious reasons for the gender gap in the labor market cannot explain the significant difference in wages and demand for labor between women and men. As example, historically the educational level of men was significantly higher than that of women. However, in current realities, women for the most part are more educated than men, but women still earn less than men. Claudia Goldin notes the biological factor as the most significant reason for gender inequality. Thus, the availability of contraceptives in pills, the flexibility of the work schedule necessary to care for children, etc. have a special impact. The defining difference in wages observed between women and men in the same profession occurs mainly when they have their first child. The author shows that there is no pay gap between women and men if a woman’s age approaches 50 and she still does not have children.

Figure 2. The effect of motherhood on wage inequality between women and men

Источник: The Nobel Prize press release (2023)

On average, in OECD countries, wage inequality between women and men is about 15% as of 2022. In EU countries, the gender pay gap is 12.7%, with the largest difference observed in Estonia (20.5%) and the smallest in Luxembourg (-0.2%). But the difference in wages in the CIS countries exceeds these indicators by approximately 2 times (see Table 1).

Table 1. Gender pay gap in selected CIS countries in 2022

Source: statistical bureaus of countries reviewed

Women and men continue to differ on a variety of employment indicators. Thus, the most important parameters in Kazakhstan can be identified:

• differences in average wages;

• requirements for a specialist when hiring. For example, during interviews, many companies pay special attention to a woman’s age, marital status and the presence of children, which can be decisive factors in refusing to hire, while the requirements for men in this regard are much lower. In other words, the “first child” effect described by Goldin is quite typical for the Kazakh labor market;

• personnel development policy (career growth for men takes less time than for women, and most companies develop predominantly the male part of the team), etc.

Goldin's work shows that inequality manifests itself not only in employment and wage statistics, but also in many other areas. For example, in families the distribution of household responsibilities between spouses, the balance between work and personal life, personal distribution of income, etc. still vary significantly. Claudia Goldin notes the need for significant revolutionary changes in current circumstances to more equitably distribute responsibilities between women and men. It offers developed measures to overcome gender inequality in employment and various strategies to create equal opportunities for women and men to realize their labor potential.

Claudia Goldin's discoveries have enormous social implications. Clearly defining the boundaries and addressing gender inequality allows for better policies to address this issue. The author's research has shown that changes in the labor market take time because career-altering choices are based on expectations that may later be proven wrong.