News - 10.10.2023

Nobel in Economics Awarded for Studying Women in the Work Force

Claudia Goldin received the Nobel Memorial Prize in Economic Sciences yesterday, on 9 October 2023. Goldin is a professor of economics at Harvard and is the third woman to receive a Nobel prize in economics since it was first awarded in 1969. She received the prize for “having advanced our understanding of women’s labour market outcomes”, according to the statement published by the Nobel committee.

Goldin’s research has shed light on the nature of the gender gap and showed that childcare plays a major role in the wage differences between men and women. This is one of the results of a study from 2010, in which Goldin tracked the wages of men and women who graduated with MBA degrees from the University of Chicago over a 15-year period. The analysis showed that there was no initial difference in wages between men and women in the group following graduation, reflecting their shared educational background and employment outlooks. However, the wages of the women who had children decreased sharply a year or two after childbirth and never recovered, being the lowest in the group at the end of the 15-year period. Having children did not, however, have such an effect on the wages of men, which increased steadily throughout the study.

The reason for this difference in wages can be traced to the fact that childcare and domestic labour is disproportionately shouldered by women who are therefore more likely than men to take extended breaks from the workforce or work part-time. When these women re-enter the workforce, they receive lower wages than men and women who do not have children. Goldin’s research indicates that childcare plays in this way a bigger role in the gender pay gap than factors like education or choice of occupation.

This phenomenon is sometimes referred to as the “child penalty” and has received further confirmation in other studies, such as in a study from 2018 in which economists at the University of Copenhagen showed that the salaries of Danish women decreased sharply with the birth of their first child and that this explained 80% of the wage difference between men and women in Denmark.

VR applauds the fact that research in this field has received the recognition of the Nobel committee. Claudia Goldin’s work is highly relevant for issues of concern in the Icelandic labour market, relating to preschool education, the “child care gap” and equality in the workplace, as well as the third shift issues that have been brought to attention by VR.