This year the Nobel Prize in Economic Sciences landed in the hands of Professor Claudia Goldin, a researcher who dedicated her life to studying women’s labour market outcomes. By examining how the female labour force evolved in the past 200 years, she managed to answer some of the most important questions for women’s emancipation.

One of the major contributions of Claudia Goldin is the revelation that the relationship between female labor force participation and economic development isn’t a simple linear one. Instead, it is shaped like a U-curve. Agricultural economies are based on family labour, with women playing a key role in production. However, as economies industrialise, women exit the labour force due to the difficulty of combining work and home tasks now that the workplace and home are physically separated and the strong stigma that only a husband who is lazy and entirely negligent of his family would allow his wife to do such dirty work as is the work in factories and industrial farms. But as income levels rise and resource constraints lessen, education becomes more accessible for both men and women, with women making remarkable progress. This allows women to re-enter the labour force, primarily in the white-collar sector, where female work is free from the stigma. The U-shaped relationship is driven by shifting job opportunities, income effects, and social norms, with increased female participation occurring in the more advanced stages of development when education and white-collar jobs become accessible.

Another remarkable contribution of Claudia Goldin is her insight into the importance of birth control in reshaping the economic status of women. In the 1970s, the widespread availability of the birth control pill in the United States led to a surge in female enrollment in fields like law, medicine, and business. This surge wasn’t due to increased acceptance rates but almost entirely from an increase in applications by women. The availability of the birth control pill allowed women to delay marriage and childbearing, allowing them to pursue higher-paying careers and achieve greater economic independence. Beginning in the 1970s, the number of women in fields such as medicine, dentistry, law, business administration, and economics increased significantly, reducing the pay gap between men and women.

Goldin’s research doesn’t end with history; it also offers an explanation for why the gender pay gap still persists in developed economies today. The gap is much lower than it once was – largely due to women now being on par with men in terms of education and career choices.  However, the gender pay gap persists because earnings are often nonlinear in relation to hours worked. Imagine two lawyers with the same education: one working long hours as a partner in a big law firm and the other with flexible hours as a general counsel. The first lawyer not only earns a higher wage but also sees their hourly wage rise with each additional hour worked. Part-time work or flexible hours come at a cost, especially in corporate, financial, and legal fields. After having children, women are more likely to opt for flexible hours or reduce their working hours, resulting in lower pay and contributing to a persistent pay gap.

Economic independence is arguably the single most crucial factor in women’s emancipation. Goldin’s research is more than just an account of the past; it lays the foundation for crafting policies that will propel women’s emancipation in the future.