Economics Nobel prize for work on gender-based pay gap

Economics Nobel prize for work on gender-based pay gap

Subject: Economy

Section: Msc

Subject

In News: Claudia Goldin wins Nobel economics prize for work on gender gap n the 2023 Nobel economics prize for her work on labour market inequalities based on gender.

Key Points:

• Claudia Goldin has been awarded the prize for exposing the causes of deeply rooted wage and labour market inequality between men and women.
• Her work provided the first comprehensive account of women’s earnings and labour market
• Her research reveals the causes of change, as well as the main sources of the remaining gender gap
• Her research reveals the causes of change, as well as the main sources of the remaining gender gap.
• There are still large differences between women and men in terms of what they do, how they’re remunerated and so on. Her work tries to answer why it is so.
• Her research found that married women started to work less after the arrival of industrialisation in the 1800s, but their employment picked up again in the 1900s as the service economy grew.
• Higher educational levels for women and the contraceptive pill accelerated change, but the gender pay gap remained.
• While historically that earnings difference between men and women could be blamed on educational choices made at a young age and career choices, Prof Goldin found that the current earnings gap was now largely due to the impact of having children.
• Prof Goldin was the first woman to receive tenure in Harvard’s economics department in 1989. Economics still had an image problem with women, she told the BBC in 2018.
• Even before students enter university, they believe economics is a field more oriented to finance and management and women are less interested in those than are men. If we explained economics was about “inequality, health, household behaviour, society, then there’d be a much greater balance,” she said.
• The economics prize is different to the original prizes in physics, chemistry, physiology or medicine, literature and peace, which were established by Alfred Nobel and first awarded in 1901.
• The Sveriges Riksbank Prize in Economic Sciences was established in 1968 and funded by Sweden’s central bank.
• Elinor Ostrom was the first woman to win the economics prize in 2009, which she was awarded jointly with Oliver E Williamson for research on economic governance.
• In 2019 Esther Duflo shared the award with her husband Abhijit Banerjee, and Michael Kremer, for work that focused on poor communities in India and Kenya.

Reasons for pay gap:

• She has attributed the gap to factors ranging from outright discrimination
• Further she has attributed it to phenomena such as “greedy work“, a term she coined for jobs that pay disproportionately more per hour when someone works longer or has less control over those hours, effectively penalising women who need to seek flexible hours.
• Only two women have previously landed the economics prize: Elinor Ostrom in 2009 and Esther Duflo.
• Goldin, is only the third woman to win the Nobel economics priz and the first to win it by herself rather than sharing it.
• India’s FLFPR is one of the lowest in the world and the lowest among the G20 countries at 19.23% .
• India’s FLFPR is one of the lowest in the world and the lowest in the G20 countries at 19.23% as per the World Economic Forum’s Global Gender Gap Report 2022. In contrast, the average FLFPR for the G20 cohort lies at 49.78%.

• India’s low FLFPR is unprecedented, considering many usual and unusual factors that keep women from the organised-formal workforce, despite knowing the fact, based on recent NFHS data, that a ‘high fertility ratio’ and ‘low education rates’, are no longer a cause for concern or a deterrent for women’s ability to be part of the organised workforce. The country has seen a reduction in fertility from0 to 2.5 children per woman as per recent data.
• Additionally, India has also seen a rise in girls’ enrolment in primary education and has seen female enrolment, for women aged 15-24, in any educational institution, go from 1% to 36% (ILO 2014). The change in these factors in the recent decades should correlate to an increase in FLFPR.
• However, the opposite is true. As per World Bank estimates, in 2004, India’s FLFPR was 2% which fell to 22.9% in 2021. World Economic Forum pegs India’s FLFPR even lower at 19.23% in 2022, in their Global Gender Gap Report 2022.

The Reasons Behind India’s Low FLFPR

• The major contributor towards India’s low FLFPR can be traced to women’s contributions towards care work at home. Indian women are responsible for most of the unpaid domestic work in the houses, may it be towards the maintenance of households or taking care of dependent family members.
• According to the International Labour Organisation, Indian women contribute 297 minutes a day towards care work, while men contribute 29 minutes the same. This implies women shoulder the burden of 90.5% of the care work, while only 9.5% is cared for by men.
• Furthermore, while on average, even in other G20 countries, women shoulder most of the burden of care work, the distribution of responsibilities is not as skewed. On average, women in other G20 countries account for 70.77% of the care work

• When it comes to care work distribution, countries in Europe (except Italy), the United Kingdom, the United States, and Canada are the most favourable performers, averaging around 61% of unpaid care work being performed by women.
• These countries perform better in this criterion, because their governments choose to invest in social care. Whereas in developing countries, like India, the burden falls heavily on women. This implies that the time that that could be utilised for formal wage-earning labour, they spend on caring for their families, for which they accrue no compensation.
• What is interesting is that even when domestic work is outsourced, and domestic help is hired, women are still responsible for ensuring the quality of care. Additionally, even when households hire domestic labour, women of the household find themselves contributing to another form of unpaid care work, rather than joining the workforce.
• An ILO-IIHS study on India’s metropolitan cities of Bengaluru and Chennai found that 40% of households hire domestic work to free up time for care for elders and children and 30% of households hire for alleviating the burden of housework. It was found that in only 8.5% of households in Chennai, and 13.5% of households in Bengaluru, domestic help is hired to free up time for paid employment.

Some Recommendations for India

The recommendation for India is to work towards increasing enrolment in higher education for women, enhance opportunities for women across different sectors, develop a robust care infrastructure, and increase access to financial resources for women entrepreneurs through direct fiscal interventions i.e. single window clearances, tax breaks, and other measures that can help directly promote women entrepreneurship in the country