Shining a spotlight

To quote David Autor, "Many think economics is just about money. That’s not true. It’s about decision-making—how people make decisions and how individual decisions aggregate up to collective outcomes that are often very different from what people are individually seeking." This year’s Sveriges Riksbank Prize in Economics, popularly called the Nobel Prize, holds great significance today and for times to come. Claudia Goldin’s victory is of profound importance. It signifies that economics not only revolves around data points and finance but also involves a wide spectrum of social issues, which are often kept at a distance considering the subject matter of sociology but impact economic and development outcomes. Her prize motivation, “for having advanced our understanding of women’s labour outcomes'', symbolizes not only her victory but the victory of an entire clan of women in the field by challenging male-centric narratives and drawing attention to the understanding of economics from the lens of women.

In this writing, I will touch upon the major findings of Goldin’s ground-breaking work, which has not only reshaped our understanding of labour markets but also played a pivotal role in advancing the cause of gender equality. Furthermore, an attempt has been made to integrate and trace the significance of her study in the Indian labour market.

The “U-shaped labour force function curve” has captured the most attention. Goldin mined 200 years of US data to show there isn’t a linear relationship between economic growth and the female labour force participation rate. She observed three stages in the employment sphere of US women: the horizon, the identity, and the decision-making. Stage-I encompasses the motivation of getting into paid work and attaining higher education. Stage II is about finding a decent and respectable job, and the last stage is the decision-making process of continuing the work post-marriage, which involves the double burden of household responsibilities, caregiving, and the readily available availability of her subject to family needs. Women in India also go through these different stages. The horizons of a young Indian girl are narrow and largely shaped by her mother’s experience. A young girl is likely to drop out of the labour force like her mother and lacks an incentive to get into higher education. The freedom of decision-making to attain higher education and work is constrained by her family’s choice, marriage, income effect, and largely to find her a suitable groom. Subsequently, post-marriage, this decision-making ability is passed on to her husband and in-laws' house setting and expectations.

Goldin, in her recent book ‘Career and Family: Women’s Century-Long Journey to Equity’, provided a justification for the phenomenon of the wage-pay gap (differentiated wage rate). Since the dawn of civilisation, this gap has largely been perceived as an outcome of occupational choices and level of education. Goldin explained it with the concept of “greedy jobs”. She emphasised greedy jobs as those that entail high rewards but demand more time and attention, like lawyers, doctors, big corporate executives, etc. As a tradition, a woman is tied to children, elderly care, and household duties, which results in her stepping back from her career for the family and taking up a ‘role and pay cut’. Her research demonstrates that the pay gap narrows significantly when women and men work in professions with more flexible hours and opportunities to combine work with family life. Further, the Nobel laureate introduced the concept of “human capital” as a way to understand the economic value of skills, experience, and education. Her insights have played a crucial role in encouraging women to pursue careers in fields traditionally dominated by men, such as science and technology, like the steely shakti of ISRO.

Celebrating Goldin’s ‘Quiet Revolution’ and her role in the advancement of oral contraceptives is a trailblazer in the field of reproductive rights and women’s economic empowerment. She observed that these pills have helped women by providing more time to carve their identities outside their homes. Her research shows the majority of women go out of the labour force not because of marriage but after childbirth, which she calls 'motherhood penalty’. By reducing unintended pregnancies and enabling women to time and space their births, these medications have contributed to better child-rearing practices, improved maternal health, and smaller family sizes, all of which have a positive impact on overall economic independence and development.

Her work on the ‘sticky floors’ and ‘glass ceilings’ that women face in their careers is pertinent in the Indian context, where there are still significant barriers to women’s advancement in the workplace. Let us ask ourselves: how many CEOs’ and MDs do we see in Indian corporations, or for that matter, how many women are represented at the top level in the government? Undoubtedly, women’s reservation in the Indian Parliament is a great victory in breaking this glass ceiling and having better representation of this one-half.

Interestingly, Goldin’s research is based on the US economy and fits it well, but to what extent it holds for India needs a deeper understanding. A Hindi-language movie, “The Ribbon,” with Kalki Koechlin as a cast, brings forward the challenges faced by a modern-day married working woman in urban India. In the most natural way, this movie portrays her as an executive in a company bearing the ‘double burden’. Her situation worsens with pregnancy, causing her constant juggling, demotion, gendered discrimination, trouble approving of maternity leave, and an eventual unintended job loss. What does it call for? Reliable and safe transportation systems, accessible and affordable childcare centres, flexible work arrangements such as remote work and part-time options to accommodate women’s responsibilities at home, implementation of policies that provide adequate maternity and paternity leave, encouraging shared family responsibilities, and a well-developed formal care economy are the need of the hour to usher women's participation and empowerment in the country.

In India, women are disproportionately employed in lower-paying, often informal sectors, working in fields such as home-based work, waste picking, construction, street vending, and so on. We have made strides in improving girls’ access to education, but there is still work to be done to ensure that women have equal opportunities to develop their skills and contribute to the economy. In a country as diverse as India, the relevance of Goldin’s work extends to understanding the intersectionality of gender with other factors such as caste, religion, and region. Overall, Claudia Goldin’s seminal work in gender economics holds immense relevance, as ‘Nari Shakti’ is the harbinger of women-led development during the Amrit Kaal.

Views expressed are personal