Gender pay parity

CLAUDIA Goldin has become the third woman to receive the Nobel prize in economics. Her research provides a basis for policymakers to address the pay gaps between men and women. The Harvard University professor used more than 200 years of US data to show that pay gaps could historically be explained by differences in education and occupational choices. Now, these exist mainly in the same jobs and largely arise with the birth of the first child. Goldin’s insights into women’s role in the labour market highlight the barriers they face. The award for her is a call for affirmative action on women’s empowerment through participation and equality at the workplace.

Prior to industrialisation in the 1800s, women were more likely to participate in the labour force. Later, compared with life on the farm, it became harder for them to combine work and family. Their employment picked up again in the 1900s as the service economy grew. Higher educational levels and the contraceptive pill accelerated change, but only just. Today, globally, only half of all women are in paid employment, compared to 80 per cent of men. They earn less, and are also less likely to reach the top of the career ladder. Fewer opportunities and earning disparities limit the optimal utilisation of human resources. Overall economic growth not improving the outcomes for many women employees is an anomaly.

In Goldin’s analysis, it is important to understand that a woman’s role in the job market is not influenced merely by socio-economic factors. The dynamics at home determine her choices. Women tend to take up jobs with flexible hours. This often widens wage gaps, which are smaller in industries with more accommodative schedules. India’s social structures vary, but inferences from the research need to be studied for effective policy prescriptions.