Claudia Dale Goldin. Photo by Lauren Owens Lambert/Agence France-Presse — Getty Images.
On Sunday, October 9, 2023, Claudia Goldin, Harvard University alumna, was awarded with the Nobel Prize in Economic Sciences for her research in the wage gap between men and women in the United States.
For many years, the wage gap has been disputed among economists. This disagreement has been caused by political orientations but also because of data collection. The wage gap is a very specific issue, primarily because of the way in which data is being collected to determine the discrepancy.
There have been a few theories for the wage gap. One theory is a direct counterargument to the wage gap: the pregnancy gap. This gap theorizes that employers are more likely to hire a young man over a young woman who are equally qualified for a job because a man will not have to go on maternity leave. This benefits the employer because they will ultimately be receiving more work from the employee and will not have to pay for maternity leave.
A second theory is the nuclear family theory, which posits that because women are more likely to perform familial duties in the household and a man is more likely to provide for his family, it is probable that total dollars made by men would be higher than total dollars made by women (because there would be more men in the workforce than women). If data for the wage gap were collected by calculating total dollars made by men and total dollars made by women and there were less women in the workforce than men, a wage gap would be apparent.
However, if we take total working dollars by men and then compare it to total working dollars by women, and compare the average wage, rather than look at total dollars collected among the sexes, and there was a quantitative disparity on either side, that would indicate an issue.
Goldin says that the reason why the wage discrepancy still exists is because there are jobs which pay substantially more to people who can work very sporadic and demanding hours, which she says indicates a preference for men.
Goldin is not the first woman to receive the Nobel Prize, but she is the first in economics to receive the Nobel Prize as an individual instead as a part of a group. Goldin claims that the transition from an agrarian (a civilization with focus on strong family structures, family farming, etc.) society to an industrial one caused less participation in the workforce of married women. This decrease, however, turned into an increase with the development of the service sector.
As women’s education increased in the twentieth century, their participation in the workforce did too. Goldin affirms the presence of disparity with women because of pregnancy. She claims that the earning difference arises with the birth of a child. This can be caused because a woman will have to produce less work in the labor market when a child enters the picture.
When comparing men and women who had attained MBA’s, Goldin describes: “most of the cumulative shortfall can be explained by women taking time out of the labor force, usually to raise children.”