Date : 12/10/2023

Relevance – GS Paper 3 – Indian Economy

Keywords – Royal Swedish Academy of Sciences, Professor Claudia Goldin, U Shaped Curve, LFPR

In a groundbreaking announcement, the Royal Swedish Academy of Sciences awarded the prestigious Sveriges Riksbank Prize in Economic Sciences for 2023 to Harvard University Professor Claudia Goldin. Recognized for her profound contributions to understanding women's labor market outcomes, Professor Goldin has delved deep into historical archives, spanning over two centuries, to unravel the complexities of female participation in the workforce. Her research challenges traditional narratives, revealing a U-shaped curve in women's labor force engagement, highlighting the intricate interplay of societal expectations, technological advancements, legislation, and individual choices.

Historical Trends in Female Labor Force Participation:

Professor Goldin's meticulous examination of historical data unveiled a surprising U-shaped curve in women's participation in the labor market. Contrary to the linear progression often assumed, female engagement in the workforce did not steadily rise with economic growth. Instead, it fluctuated significantly due to a multitude of factors. One notable revelation was the misrepresentation of female labor force participation in historical records, with women's contributions often underestimated and overlooked.

During the transition from agrarian to industrial societies, the labor landscape for women underwent a transformative shift. Industrialization made it increasingly challenging for married women to balance work and family life, leading to a decline in their overall participation. However, unmarried women found opportunities in the manufacturing sector. Professor Goldin's research corrected historical inaccuracies, emphasizing the need to acknowledge the multifaceted roles women played in the workforce.

Factors Influencing Female Participation (Globally):

Expectations about women's future careers played a pivotal role in shaping their employment decisions. Societal norms dictated that women exit the labor force upon marriage, limiting their career prospects. Even when married women re-entered the workforce, their earlier educational choices, made at a time when career aspirations were limited, impacted their opportunities. This cyclical pattern persisted until the 1970s when young women started investing more in education, challenging conventional expectations and paving the way for increased female labor force participation.

Additionally, the introduction of birth control pills revolutionized women's lives, enabling them to plan their careers effectively. While this advancement influenced educational and career choices, it did not completely eradicate the earnings gap between men and women. Nevertheless, it significantly reduced the disparity, allowing women greater control over their professional lives.

Despite advancements, pay discrimination emerged as a significant challenge for women. As the service sector expanded in the twentieth century, pay discrimination became more pronounced. Employers favored individuals with "long and uninterrupted careers," perpetuating gender disparities in earnings. This trend contradicted the decreasing earnings gap between men and women, highlighting the persistence of discriminatory practices.

Status of Women’s participation in Workforce in India

The data from the Periodic Labour Force Survey (PLFS) conducted between July 2021 and June 2022 indicates that India's historically low female labor force participation rate (LFPR) has shown limited progress. The survey reveals that 29.4% of women aged 15-59 were active participants in India's workforce in the 2021-22 period, compared to 29.8% in the previous year. In contrast, men's LFPR saw a slight improvement, rising from 80.1% in 2020-21 to 80.7% in 2021-22.

Factors Hindering Women's Employment in India

• Unpaid Labor and Vulnerable Employment: Women often engage in unpaid household and caregiving work, which goes unrecognized and unaccounted for in labor force statistics. Additionally, many women find themselves in low-paying and exploitative jobs in the private sector, exacerbating gender disparities.
• Societal Norms and Gender Roles: Conservative societal norms prioritize women's roles within the family, leading them to leave jobs, especially after marriage or childbirth. Domestic responsibilities and caregiving roles often hinder women's workforce participation.
• Gender Pay Gap: Disparities in earnings persist across casual work, regular jobs, and urban self-employment, reinforcing the gender wage gap. This gap is also prevalent in technology roles and senior management positions.
• Lack of Suitable Job Opportunities: Women face limited job options, particularly in male-dominated sectors like manufacturing, hindering their entry and progress in the workforce.
• Reliance on Agriculture: Rural areas heavily rely on agriculture for employment, making it challenging to transition employment opportunities to industries that offer better prospects.
• Safety Concerns: Safety concerns, particularly in urban areas, discourage women from seeking employment. Inadequate urban infrastructure and public safety issues further limit women's access to jobs.
• Choosing Education over Work: Education is a priority for many women, leading to temporary workforce absence. However, re-entering the workforce post-education poses challenges in finding suitable employment opportunities.

Addressing the Challenges:

To empower women in the workforce and promote gender equality, India needs comprehensive strategies and changes at individual, societal, and governmental levels:

• Equal Pay and Job Evaluation: Ensuring equal pay for work of equal value through legal protection, wage transparency, and gender-neutral job evaluation can bridge the gender pay gap.
• Challenging Occupational Segregation: Addressing preconceived notions about certain types of work and challenging occupational segregation can diversify job opportunities for women.
• Eliminating Discrimination and Harassment: Legislation, effective remedies, and awareness campaigns are essential to eliminate gender discrimination and harassment in workplaces.
• Promoting Work-Family Balance: Providing adequate maternity protection, paid paternity and parental leave, and social protection measures can help women balance work and family responsibilities.
• Creating Quality Care Jobs: Improving regulation and protection for care professionals and creating quality care jobs can enhance opportunities for women in the workforce.
• Gender-Responsive Policies: Implementing gender-responsive policies can safeguard women's employment during economic downturns and promote long-term workforce participation.

Contributions Through Publications:

Professor Goldin's impactful research is documented in her influential publications. In her 1990 work, "Understanding the Gender Gap: An Economic History of American Women," she dissected the wage gap between men and women and examined the emergence of wage discrimination. Collaborating with Lawrence Katz, she co-authored "The Race Between Education and Technology" in 2008, emphasizing the role of education in economic growth and individual productivity. Their findings revealed the substantial educational progress made by women, even amid economic challenges.

In 2018, Professor Goldin and Katz edited "Women Working Longer: Increased Employment at Older Ages," shedding light on the growing trend of older American women participating in the labor force. This comprehensive exploration delved into various factors, including education, work experience, and financial stability, influencing women's decisions to work beyond traditional retirement ages.

Her 2021 publication, "Career & Family," provided a century-long perspective on women's struggle to close the gender wage gap. Professor Goldin highlighted the importance of the contraceptive pill, which empowered women to make informed decisions about marriage and career. Moreover, she emphasized the significance of equitable distribution of household responsibilities, emphasizing the need for shared chores between couples.

Conclusion:

Professor Claudia Goldin's pioneering research has reshaped our understanding of women's labor market outcomes. By unraveling historical inaccuracies and challenging societal expectations, she has paved the way for a more nuanced perspective on female workforce participation. Her work not only sheds light on past challenges but also offers invaluable insights for shaping a more equitable future. As the first solo female recipient of the Sveriges Riksbank Prize in Economic Sciences, Professor Goldin's legacy continues to inspire generations, encouraging a reevaluation of gender dynamics in the labor market and beyond.

Source – The Hindu