Claudia D. Goldin

Introduction

Early Work: Non-Agricultural Slavery

Claudia D. Goldin

Goldin turned her Ph.D. dissertation on the economics of slavery into a book, Urban Slavery in the American South, 1820–1860: A Quantitative History (1976). In her research, she used census and probate records to examine slave occupations in southern cities. She found that, by 1860, out of a total population of about 4 million slaves, there were 100,000 urban slaves who worked in non-agricultural jobs that included blacksmithing and manufacturing. Her work undercut the widespread view that for slavery to persist, slaves had to be employed in agriculture.

Goldin’s decision to write a book reflected her independent thinking: economists rarely turn their dissertations into books. In a 2021 video for Marginal Revolution University,1 her husband, fellow Harvard labor economist Lawrence F. Katz, told a humorous story about her economic self-sufficiency that’s worth relating here:

• She thought what I [Goldin] should do is hitchhike between the different cities in the South. She met some woman from one of the archives who let her stay at their place, and when she came back, her advisor asked her for a list of the receipts and expenses associated with the trip, and she had no clue that you were supposed to actually stay in hotels and pay for actual travel and that you could get reimbursed for this.

• But in fact, by actually staying with the archivist and getting access to archives and knowledge that you wouldn’t have had, it probably created inroads and understanding that wouldn’t have been possible if you were going through usual channels.

Early Research on Women

In the early 1980s, Goldin began her work on women in the workforce. She quickly discovered that 20th century census data were imperfect. For example, in examining pre-1940 census data, she found that if a woman worked fewer than twenty-six weeks in a year, she might have answered that she had no occupation. What Goldin really needed to fill out the picture were retrospective work histories. So she went to the National Archives and dug through boxes of data from the Women’s Bureau. With those data and further sleuthing of data back to the late 18th century, she was able to form a picture.

Goldin showed that in the early 1800s, women were major participants in the labor force. They did much of the work on farms, which, back then accounted for well over half of all jobs. But as farming productivity rose in the late 19th century, jobs shifted from farming to industry. Some women shifted into those jobs, but women’s overall participation in the labor force fell. Why? Presumably because although women could take care of their children while working on their farms, it was hard to juggle raising children with working outside the home.

Goldin showed that the participation rate of women in the U.S. labor force was U-shaped. In the 19th century, as noted above, it fell; and then in the mid-20th century it rose as the service sector increased. Women got clerical jobs; and as they became more formally educated, got higher-level jobs. After World War II, the introduction of labor saving-machinery in the household—automatic washers and dryers, for example—led to a further increase in women’s labor force participation.

The Power of the Pill

Goldin and co-author Lawrence Katz found that an important source of employment growth for women after 1960 was the birth control pill. While it might be hard to believe now, at first there were substantial restrictions on who could legally use it. Goldin and Katz wrote:

• Before the late 1960s, it was not legal in any state for a physician to prescribe an oral contraceptive to an unmarried minor without consent of her parents…. But by 1972, on the heels of the Twenty-sixth Amendment (1971), the “age of majority” had been lowered to 18 years old in most states.2

This expansion in eligibility made it easier for young women to invest in careers and delay marriage.

That career investment, in turn, led to young women getting more formal education. By 2005, women made up half or almost half of first-year students in professional programs such as law, medicine, and dentistry. It was only natural that earnings would follow and that the wage gap would fall.

Is It Discrimination?

In “Gender Gap,” Goldin wrote that in 2000, “of all twenty- to sixty-four-year-olds, women made up 47 percent of the labor force.” She pointed out that the ratio of female to male earnings for full-time year-round jobs rose from 60 percent in the 1980s to 75 percent by 2000. Since then, the ratio has increased to about 83 percent.

What accounts for the remaining wage gap? Labor economists often point to men’s and women’s choices of occupation, which often reflect their choice of college major. In announcing the prize to Goldin, the Nobel committee cited a finding that for women who had a labor force attachment like that of men, the choice of college major accounted for more than half of the gender earnings gap. Women are substantially underrepresented in the STEM [Science, Technology, Engineering, and Mathematics] fields.

A way to compare pay of men and women is to compare earnings of people in the same occupation who had the same, or similar, schooling. In a 2010 study, Goldin and co-authors Lawrence Katz and Marianne Bertrand of the University of Chicago did just that. The major factor behind long-term differences in earnings, they found, was child-raising. For MBA students who graduated from the University of Chicago’s business school between 1990 and 2006, the authors found a virtually zero gender gap in employment and wages just after graduation. Ten years later, though, women had taken an average of one year off from work while men had taken off an average of only one eighth of a year. Presumably the reason is that many of the women were having and raising children. The authors found that three factors—the particular MBA courses taken and their performance in the courses, their time away from work, and the number of hours worked—explained 84 percent of the diminished wage gap.

That fits with another result in a 2010 study by Goldin and Katz. They found that women receive a wage penalty for demanding a job that’s flexible enough for the woman to be the “on-call” parent. Men, by contrast, receive a wage premium for being willing to be the “on-call” employee.

The Race Between Education and Technology

In 2007, Goldin, with co-author Lawrence F. Katz, did detailed empirical work on what they called “the race between education and technology.” The race was between two forces. On the one hand, improvements in technology tend to increase the demand for skilled workers which, on it own, would increase the pecuniary return to education. On the other hand, educational attainment in the form of increased schooling would increase the supply of skilled workers; that would, on its own, reduce the return to education. They dug into the long historical record of U.S. schooling, wages, and labor-market outcomes. They paid particular attention to the high school movement, which was the expansion of mass secondary education in the early twentieth century, and later to the expansion of college attendance.

Here’s how they summarized their findings:

• An increase in the rate of growth of the relative supply of skills associated with the high school movement starting around 1910 played a key role in narrowing educational wage differentials from 1915 to 1980. The slowdown in the growth of the relative supply of college workers starting around 1980 was a major reason for the surge in the college wage premium from 1980 to 2005.3

Goldin’s Approach

In the biographical essay she wrote for the Nobel site after she was awarded the prize, Goldin explained her approach to empirical work. Reading that biography is like reading a first-person account by a detective who has uncovered a crime, with this important difference: her findings are about work and earnings, not crime. Indeed, the title of her essay is “The Economist as Detective.”4

In this key paragraph of her essay, Goldin explained the questions she answered and the approach she took to answer them:

• The central question I posed was: why did the female labor force expand at certain times and for certain cohorts? What had caused married women to increase their paid market participation rate from around 5% to 70% across the twentieth century? I first had to track the expansion in every possible way. I began by assembling as much data as I could find in easily accessible sources. I pushed the project forward in time (to the present) and backward (to the 1790s), and tackled various topics in turn, producing series or estimates on the labor force by age, marital status, race, and ethnicity. I also produced series on earnings, work experience, and “wage discrimination,” among others.

Early Life and Education

Goldin was born in New York City. She earned her Bachelor of Arts degree, with a major in economics at Cornell University, where she graduated in 1967. She had planned to major in math, but a course she took in economics with Alfred Kahn (se Airline Deregulation – 1st edition by Alfred Kahn) caused her to switch majors.

Goldin earned her Ph.D. in economics at the University of Chicago in 1972. Encouraged by cliometrician and economic history Robert Fogel, himself a later winner of the Nobel Prize, she turned a term paper into her dissertation. The topic, as noted, was the effect of slavery on the economic development of the antebellum South.

Selected Works by Claudia Goldin

1977. “Female Labor Force Participation: The Origin of Black and White Differences, 1870 and 1880.” Journal of Economic History, 37(1): 87–108.

1984. “The Historical Evolution of Female Earnings Functions and Occupations.” Explorations in Economic History, 21(1): 1–27.

1990. Understanding the Gender Gap: An Economic History of American Women. Oxford: Oxford University Press.

1995. “The U-shaped Female Labor Force Function in Economic Development and Economic History. In: T.P. Schultz (ed), Investment in Women’s Human Capital and Economic Development. Chicago: University of Chicago Press.

1998. “America’s Graduation from High School: The Evolution and Spread of Secondary Schooling in the Twentieth Century.” Journal of Economic History, 58(2): 345–374.

2000. “Career and Marriage in the Age of the Pill.” (co-authored with Lawrence F. Katz) American Economic Review, 90(2): 461–465.

2005. “From the Valley to the Summit. A Brief History of the Quiet Revolution that Transformed Women’s Work.” Regional Review, 14(3): 5–12.

2006. “The Quiet Revolution That Transformed Women’s Employment, Education, and Family.” American Economic Review, 96(2): 1–21.

2007. “The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005.” (co-authored with Lawrence F. Katz) National Bureau of Economic Research, Working Paper #12984, March.

2010. (with Marianne Bertrand, Marianne and Lawrence F. Katz. “Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors.” American Economic Journal: Applied Economics, 2(3): 228–255.

2014. “A Grand Gender Convergence: Its Last Chapter.” American Economic Review, 104(4): 1091–1119.

Footnotes

[1] Claudia Goldin, “Women in Economics,” Marginal Revolution University, 2021.

[2] Goldin and Katz, “The Power of the Pill: Oral Contraceptives and Women’s Career and Marriage Decisions,” Journal of Political Economy, Vol. 110, No. 4, August 2002: 730-770.

[3] Goldin and Katz, “The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005,” National Bureau of Economic Research, Working Paper #12984, March 2007.

[4] Claudia Goldin, “The Economist as Detective,” Nobel Prize Essay.