American economic historian Claudia Goldin has been awarded the 2023 Nobel Economics Prize for her groundbreaking research on wage inequality between men and women, as announced by the Royal Swedish Academy of Sciences on Monday.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2023 has been conferred upon 77-year-old Claudia Goldin, “for having advanced our understanding of women’s labour market outcomes,” stated the prize-giving institution.

Goldin will be the sole recipient of this year’s prize, receiving 11 million Swedish kronor (approximately USD 1 million) in recognition of her significant contributions.

Currently serving as a Professor of Economics at Harvard University, Claudia Goldin is only the third woman to be honoured with the Nobel Prize in Economics. Previous female laureates include Elinor Ostrom in 2009 and Esther Duflo in 2019, with Duflo being 46 years old at the time of her award.

The Royal Swedish Academy of Sciences noted that Goldin expressed her surprise and immense happiness upon hearing the news of her win.

Goldin’s extensive research has illuminated the key drivers behind gender disparities in the labour market, offering new and often surprising insights into the historical and contemporary roles of women in the workforce. Over the past century, the percentage of women engaged in paid employment has significantly increased in many high-income nations, representing one of the most substantial socioeconomic changes in the modern labour market. However, substantial gender disparities persist.

By delving into archives, and compiling and correcting historical data, Goldin has unveiled fresh and often astonishing facts. Her research highlights the limitations women have historically faced due to marriage and responsibilities within the household and family. These findings extend beyond the borders of the United States, as similar patterns have been observed in numerous other countries.

Goldin’s work is essential for enhancing our comprehension of labour markets from the past, present, and future. Her extensive collection of over 200 years of U.S. data has allowed her to elucidate the evolution of gender disparities in earnings and employment rates over time.

One of Goldin’s pivotal findings is the U-shaped curve depicting female labour force participation, which declined as societies transitioned from agrarian to industrial in the early 19th century but subsequently rose with the growth of the service sector in the early 20th century. This pattern is attributed to structural shifts and evolving societal norms regarding women’s roles in their homes and families.

Moreover, Claudia Goldin has elucidated that access to contraceptives, particularly the contraceptive pill, played a significant role in accelerating changes in women’s career planning opportunities. While education and occupational choices historically accounted for much of the gender wage gap, Goldin’s research indicates that the primary earnings difference now occurs between men and women in the same occupation, primarily emerging with the birth of the first child.

Despite modernization, economic growth, and an increased proportion of working women in the 20th century, the earnings gap between genders remained persistently wide. Goldin suggests that this is partly due to educational decisions made at a relatively young age. If young women’s expectations are influenced by the experiences of previous generations, who often did not return to work until their children had grown up, progress is inevitably slow.

Understanding women’s roles in the labour market is vital for society, and Claudia Goldin’s groundbreaking research has shed light on the underlying factors and the barriers that may need to be addressed in the future, according to Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences.

Jason Furman, a former top economic adviser to President Barack Obama, expressed his enthusiasm for Goldin’s achievement, describing her as a “fantastic” and “pathbreaking scholar” who has reshaped his understanding of inequality and women’s labour force participation while serving as a generous mentor to numerous students. Furman commended her book “Career and Family,” which attributes the gender pay gap to institutional challenges rather than discrimination and highlights the significant negative impact of childbirth on women’s earnings.

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