You have written about women and their role in the American economy. Can you briefly define the evolution of this role over the last one hundred years or so?
Women have always been involved in the country’s economy.
The economy is not just what goes on outside the home,
but also what goes on inside the home; yet we often ignore
what goes on inside the home, because it’s like a little black
box, and we can’t measure it, and it doesn’t get added into
gross national product. The shift in the 1920s, the shift to a larger service sector
economy, is one of the important changes that led to a very
large increase in women’s employment. This was connected
to educational advances during this time period. It was sort
of a secular change, and then, I would say, as equally important
as the changes that occurred in the late 1960s and 1970s.
These gave young women in high school and college the sense
that their participation in the labor force was not going to be
fleeting and secondary, but was going to be of much greater
importance, [and led to the realization that] they should invest
more in their education.
As I have noted in one of my papers, “The Quiet Revolution that Transformed Women’s Employment, Education, and Family,” we spend a lot of time thinking about labor force participation or hours or whatever margin we want to think about in terms of participation, but in many countries, at many times the participation of women [in the labor force] can be very high, and yet they are still not in any way, shape, or form equal [to men]. They are not doing equal work, and they are not treated equally. [For example], though labor force participation rates [in the United States] were relatively high by the 1970s—not as high as they were later, but still relatively high—many women who were in the labor force had not predicted that they were going to be in the labor force for very long, and so their educational levels, their majors in college, and their aspirations were very different.
In your paper, “A Grand Gender Convergence: Its Last Chapter,” you suggest that women’s and men’s roles have been steadily converging. Can you elaborate on what you mean by this?
The idea is to think about this as a book that has many
different chapters, and the chapters are about how women increase
their labor force participation, they increase their hours
of work, they become better educated, they realize that their
life cycle labor force participation will be relatively long, et cetera.
So if you think about each of these [ideas] as a separate
chapter, [in] each one of them, the genders are converging in
[terms of] each one of these factors.
Then the question is: when will there be equality in terms of earnings, and what is holding that back? There is a [lot of] literature on what we call wage discrimination. [In it], you get a lot of data with lots of good covariants, and you ask, if I, in some econometric way, make the women look like the men or make the men look like the women, in terms of what they bring to the labor market, will they earn the same amount? In [the] 1970s, the women have less education [than the men]. In [the] 1980s, they are beginning to get an equal level of education, but they are still majoring in subjects that are not highly rewarded in the labor force. In terms of the experience that they bring to the labor force, it is somewhat less [than that of men].
So what we do is we sort of squeeze out all these differences and then we can [see] what is left in terms of the difference between men’s earnings and women’s earnings. So what we do, econometrically, is make women into men by giving them the covariants that the men have. We give them the same education, we give them the same majors, and then we [try to] see, “if the women had the same level of these various attributes and characteristics as the men, would they still be earning less?”
What we have discovered is that more recently there is almost nothing to squeeze out. Women have equal or even greater levels of education, they are majoring in subjects that are about the same (but not exactly the same) as men, they are going to professional schools, and their life cycle labor force participation is a little bit less, but not that much less [than that of men]. This is what I mean by the grand gender convergence.
Do you agree with the view that the reason a gender wage gap exists is because employers often discriminate against women, solely on the basis of their sex?
Saying the word “discrimination” implies that someone is
doing it; someone separate from the individual herself is doing
something really nasty, and horribly nasty things do happen
to women, to minorities; they happen to lots of people in the
labor market, but it would be astounding if all of this was due
to out-and-out or even subtle bias. That does not make much
sense. We have lots of evidence that there is some [discrimination],
but it cannot possibly account for everything. It is very
hard to say that men do not like women. They all have mothers,
many have wives, some have sisters, many of them have
daughters, so it does not make terribly much sense.
If you say women are being discriminated against and that means that employers will only hire them if they are cheaper—well, if they are cheaper, then maybe there are some employers who are non-discriminatory, and who will go hire them and do better.
According to you, then, why does the gender wage gap exist, not just in the United States, but around the world?
You can just look around you and ask women and men
who have kids which one of them took a job that allows that
parent to be able to be home at certain times and certain
days. It is almost uniformly—not always but generally—the
woman. One way of seeing this is by asking, “straight out of
college, do men and women get pretty equal salaries?” Not
“equal,” but “pretty equal” and the answer is “yes.” Then
you ask, “when do these salaries begin to fan out?” So you track people, longitudinally, and you can see that the salaries
begin to [diverge], almost always, when there is a kid, a first
kid, or a second kid.
Let’s just give an example. We have a husband and wife, and they both have IT degrees. They are both equal at what they do, they both get jobs in the same firm, and their titles are the same, but then they are asked if they will be available in an on-call manner. Some of the firm’s clients have IT systems that go out at two in the morning or on a Sunday, and these clients are willing to pay a lot for stuff done at two in the morning. [If] one member of the couple decides to do that work, because it will increase their income by about 50 percent, it generally will be the guy. They have kids and they decide that the wife will do an equivalent amount of work in terms of days, but [the husband] will be available for on-call. I know people who fit this perfectly.
In this case, the production function of the firm is such that that they have clients who may need [work to be done] at some bizarre time of the day, or on the weekends, or on holidays, and people have to be paid extra for this disamenity. There will always be jobs like this and firms [such as] this, but firms generally want to clamp down on this; they do not want to pay people extra amounts to do things like these.
Where this becomes most important is at the upper end of the income distribution, around US$50,000 and above a year. My favorite example are pharmacists. Pharmacists are highly paid and well-trained, but they get virtually no part time penalty [the penalty of making less per hour of part time work than they would if they had worked full-time] and no overtime amount of benefit. Male and female pharmacists earn just about the same amount per unit of time, but women work fewer hours than men so they earn less [overall]. When men work longer hours, they get more than just working more hours. They earn more per hour, and it is not because they are men, but because they are getting paid for a disamenity.
Claudia Goldin is the Henry Lee Professor of Economics at Harvard University. Goldin has conducted extensive research on topics ranging from education to the impact of war and the New Deal, and has published books including Understanding the Gender Gap: An Economic History of American Women and The Race Between Education and Technology. Goldin has also served as the president of both the American Economics Association and the Economic History Association.