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Opinion

Illuminating the gulf

Claudia Goldin’s work reveals a glaring gap between wages paid to male and female workers, its economic fallouts, and women’s limited advancement across sectors

Illuminating the gulf
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Even though women have made remarkable progress in education, labor force participation, and career fulfillment, they continue to face disparities in earning potential and advancement opportunities. Claudia Goldin, the 2023 Nobel laureate in economics, has spent decades chronicling the evolution of women in the workforce. She highlights how women’s roles in society have transformed significantly over the past 50 years, calling it "among the grandest advances in society and the economy."

However, Goldin's research shows that despite these gains, women still trail men in earning potential, employment rates, and the likelihood of attaining high-level positions in their industries. This disparity persists across various sectors, despite legislative efforts like the Equal Remuneration Act of 1976 in India, which aimed to eliminate wage discrimination.

Economic costs of gender disparity

The economic costs of sexism continue to disproportionately affect women. Despite equal qualifications, women are consistently paid less than men for the same roles. Studies have found that families relying on female breadwinners are often poorer than those with male breadwinners, partly because of systemic wage discrimination. Additionally, technological advancements have reduced job opportunities for women in several sectors, including agriculture, textiles, and clerical work, further diminishing their contributions to GDP.

Goldin's groundbreaking work

Claudia Goldin's research has been instrumental in understanding the historical and economic factors that have shaped women’s labor market outcomes. Her work debunks the myth that women’s employment rises proportionally with economic growth. Goldin's 1990 book ‘Understanding the Gender Gap: An Economic History of American Women’ highlighted how industrialisation in the 18th century actually reduced women’s participation in the workforce, as factory jobs required them to be away from their homes and families, making it difficult for married women to balance work and domestic responsibilities.

The birth control pill, introduced in the 1960s, played a pivotal role in increasing women’s labor force participation by enabling family planning and allowing women to pursue higher education and careers. However, despite these advancements, Goldin's research reveals that women still experience wage penalties after becoming mothers, often due to societal perceptions of their reduced availability.

Relevance of the gender pay gap

The gender pay gap remains a critical issue worldwide. According to the World Economic Forum’s 2023 Global Gender Gap Report, the gap is only 68.4 per cent closed globally. Based on current trends, it will take over 200 years to fully close the gap. The causes of the gender pay gap are multifaceted and include factors such as parenthood, part-time work, and racial disparities.

For instance, women with children are less likely to be employed and, if they are, they often work fewer hours, leading to lower wages. In contrast, fathers tend to work more hours and earn higher wages, a phenomenon known as the "fatherhood wage premium." Additionally, women are more likely to take breaks from the workforce to care for children or elderly relatives, which can hinder their career progression and earnings.

Gender disparities across sectors

1. Legal occupations: In the legal profession, women earn significantly less than men, even though they negotiate for raises and promotions at similar rates. Women are often underrepresented in higher-paying positions, such as judges or senior partners, and are more likely to be relegated to lower-paying roles like legal assistants.

2. Finance: The financial services industry has been slow to close the gender pay gap, despite societal pressure and a growing number of women entering finance degree programs. In the UK, men in the banking sector earn, on average, 24 per cent more per hour than women, with the unpaid care burden disproportionately falling on women, further limiting their ability to pursue full-time, higher-paying jobs.

3. Sports: Gender pay disparities are particularly glaring in sports, where women are paid significantly less than men. For example, in Indian cricket, the highest-paid female player earns only 7 per cent of what her male counterpart makes. Arguments for this disparity often cite revenue generation and physical performance differences, though these reasons are increasingly being challenged as outdated and biased.

4. Defense: The defense industry also exhibits a significant gender wage gap, with women underrepresented in senior positions and often clustered in lower-paying support roles. This underrepresentation contributes to the pay disparity, as leadership positions typically command higher salaries.

5. Entertainment: In the entertainment industry, female actors earn significantly less than their male counterparts, even when they have similar levels of experience. The gender pay gap is most pronounced in action films, where male actors dominate leading roles. Additionally, older actresses experience the largest wage disparities compared to their male peers.

The path forward

Closing the gender pay gap requires concerted efforts across all sectors of the economy. Legislative measures alone are not enough; systemic change is needed to address the underlying cultural and societal norms that perpetuate gender inequality. Ensuring equal pay for equal work, promoting women to leadership positions, and providing affordable childcare are just a few of the necessary steps to achieve gender parity in the workforce.

As Claudia Goldin's work has shown, while women have made tremendous strides in the labour market, much work remains to be done to ensure that they can achieve true equality in both pay and opportunities. Addressing the gender pay gap is not just a matter of fairness; it is essential for economic growth and the well-being of society as a whole.

The writer is a Grade XII student, Modern High School for Girls. Views expressed are personal

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