Tuesday, June 2, 2015

Claudia Goldin on Women, Education, and the Labor Force

Claudia Goldin is interviewed by Jessie Romero in the Fourth Quarter 2014 issue of EconFocus, published by the Federal Reserve Bank of Richmond. The whole interview is worth reading, but here are a few of her comments that caught my eye.

How the contraceptive pill altered perspectives of women on the labor market
"That meant these young women could engage in different forms of investment in themselves; they attended college to prepare for a career, not to meet a suitable spouse. College women began to major in subjects that were more investment oriented, like business and biology, rather than consumption oriented, like literature and languages, and they greatly increased their attendance at professional and graduate schools."

The Last Chapter of the Grand Convergence

"Women and men have converged in occupations, in labor force participation, in education, where they've actually exceeded men — in a host of different aspects of life. One can think about each of these parts of the convergence as being figurative chapters in a metaphorical book. And this metaphorical book, called "The Grand Convergence," has to have a last chapter. But what will be in the last chapter? ... So I went looking for facts, and I found two big pieces of information suggesting that the last chapter, which is about gender equality in pay per unit of time worked, must have greater temporal flexibility without large penalties to those who work fewer hours or particular schedules. ...
"Across the wage distribution, the vast majority of the gender gap is occurring within occupations, not between occupations. There's considerable discussion about occupational segregation, but you could get rid of all occupational segregation and reduce the gender gap by only a small amount. ...

"So then the question is, why are there some occupations with large gender gaps and others with very narrow gaps? There are some occupations where people face a nonlinear function of wages with respect to hours worked; that is, people earn a disproportionate premium for working long and continuous hours. For example, someone with a law degree could work as a lawyer in a large firm, and that person would make a lot of money per unit of time. But if that person worked fewer than a certain number of hours per week, the pay rate would be cut quite a bit. Or someone could work fewer or more flexible hours as general counsel for a company and earn less per unit of time than the large-firm lawyer. Pharmacy is the opposite — earnings increase linearly with hours worked. There's no part-time penalty."

[I blogged about this line of Goldin's research back in January 2014.]

Women Working Longer

"My current project is called "Women Working Longer." I'm working with a group of people who study aging, retirement, and health. We're interested in the fact that labor force participation rates for younger women peaked in the 1990s, but that participation for older women has increased enormously. Among college graduates today, about 60 percent of those aged 60-64 and 35 percent of those aged 65-69 are in the labor force. Even among those aged 70-74, about 20 percent are in the labor force.
"This raises all sorts of interesting questions about why. Is it because these women were hit with divorce shocks? Do they want to retire but then they look at their savings and realize they can't retire? Or is it that the world of work has changed and they love what they're doing? There are a host of issues to study concerning family, occupations, education, health, financial resources, and retirement institutions."