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
\”One of the most important changes was the appearance of reliable, female-controlled birth control. The pill lowered the cost to women of making long-term career investments. Before reliable birth control, a woman faced a nontrivial probability of having her career derailed by an unplanned pregnancy — or she had to pay the penalty of abstinence. The lack of highly reliable birth control also meant a set of institutions developed around dating and sex to create commitment: Couples would \”go steady,\” then they would get \”pinned,\” then they would get engaged. If you\’re pinned or engaged when you\’re 19 or 20 years old, you\’re not going to wait until you\’re 28 to get married. So a lot of women got married within a year or two of graduating college. That meant women who pursued a career also paid a penalty in the marriage market. But the pill made it possible for women who were \”on the pill\” to delay marriage, and that, in turn, created a \”thicker\” marriage market for all women to marry later and further lowered the cost to women of investing in a career. …
\”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.\”
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.\”