Why Claudia Goldin won the 2023 Nobel Prize in Economics?

On October 9, 2023, Claudia Goldin, a professor of economics at Harvard University, was awarded the Nobel Prize in Economics for 2023, making her the third woman to win this prestigious award in economics after Esther Duflo and Elinor Ostrom, and the first woman to receive the prize as the sole laureate. It should be first indicated that the Nobel awards focus on contributions regardless of the gender factor. Despite her research interests as an economic historian, Goldin won the award in recognition of her research on women participation in the labour market in the United States.

A major achievement of Goldin’s work is correcting some misconceptions about female participation in the labour force, which have long been taken for granted. Her work, which combined economic history and labour market economics, demonstrated that such presumptions were not necessarily accurate. For instance, she explained that the assumption that economic growth alone would be sufficient for increasing female participation in the labour force was not accurate.

Comparing industrial countries with developing ones shows a disparity between the role of women in the labour market. As such, there was a perception that development, higher economic growth rates, and higher employment demand would automatically ratch up women integration and participation in the workforce. But, by studying the economic journey of women in the last 200 years and analysing it in an innovative statistical method, Goldin proved that economic growth in the United States was never necessary for accelerated female labour participation. Periods that were characterised by economic growth during the industrial revolution had not seen increased women participation in the workforce. And that economic growth and female participation in the labour force takes a "U-shaped curve". This means that women role in the labour market was high in the agrarian society, but the transition from an agrarian to industrial society decreased their participation, due to difficulties in balancing work and family life. Early industrial times were also marked by tough working conditions and poor working environment. Stigmatising women working in the factories also played a part in making women reluctant to join the labour market, despite economic growth and development, and higher labour demand during the structural economic transformation.

In the post-industrial era, the emerging role of the service economy, higher office work demand during the World War II and drafting of men as soldiers, as well as the introduction of contraceptive pills, all these factors led to a historic economic turn for women, as their participation had gradually increased after falling during the industrial revolution (Figure 1).

Goldin also showed why women labour participation was proceeding slowly, by highlighting the role of future expectations in young girls’ decisions regarding education and labour market access. She stated that young girls always looked at mothers from the previous generation (Figure 2). If mothers from the previous generation left the labour market after getting married and they did not return, young girls were not expecting to continue their careers for a long time after marriage. Consequently, young girls were not very keen on advanced education for a longer career. With legalising contraception and enacting modern legislations to support women after pregnancy, young girls discovered that they could return to the labour market even after marriage. Young girls, however, faced a difficulty in that the levels of education attained according to their projections about the previous generation were no longer sufficient for labour market access, and therefore women integration in the workforce was progressing slowly across the world.

Dr Ahmed Rashad is assistant professor of Economics at Anwar Gargash Diplomatic Academy