Setting the Gold(in) Standard in Research on Women in the Workforce

Claudia Goldin, the 2023 recipient of the Nobel Prize in Economics, laid the foundation for our understanding of caregiving’s implications for women in the workforce. Her research delved into the changes in women’s labor force participation after welcoming a child, elevated causes of the gender wage gap, and revolutionized our thinking on balancing careers and families and the benefits of paid family leave. Her work further provides a clear lens to tailor public policy interventions.

Women Balancing Work and Caregiving

Goldin’s work documents the effects of the “motherhood penalty” on women in the workforce. Despite the steady increase in women’s labor force participation over the past 70 years—with today’s labor force participation rate of prime-age (traditionally defined as those aged 25-54) women near an all-time high—the time demands of caregiving and pay inequity still disproportionately fall on women. In fact, a recent BPC-Artemis Strategy Group poll found that 50% of prime-age women not currently looking for work cite caregiving responsibilities as the main reason they are not employed.

Goldin not only highlighted how women earn less than men following the birth of their first child—a phenomenon referred to as the parental gender pay gap–but that fathers are often rewarded at the same time. Today, this gender pay gap remains a top issue for women in deciding to return to work following childbirth. When compared to a wide range of potential workplace benefits, women out of the workforce rank paid family and medical leave (15%) as nearly as important as compensation (16%) when identifying the single most important benefit for returning to work. As such, access to policies such as paid family leave can also be a solution to help curb the motherhood penalty.

Paid Family Leave Reduces Barriers for Women at Work

An analysis published by Goldin, Kerr, and Olivetti in January 2020 showed that firm-provided paid parental leave benefits greatly increased over the past two decades. These trends suggest that employers see the value of paid leave benefits for workers, and in a tight labor market, recognize that these benefits can help attract and retain top talent.

Further expanding access to paid family leave would help many women enter or return to the workforce. The weight of research shows that paid family and medical leave increases labor force participation, especially among women. Studies have found that women who take paid family leave after giving birth are 40% more likely to return to work than those without the benefit. The workforce benefits of paid leave also have long-term implications. Goldin’s research shows that, a decade after childbirth, the labor force participation rate of mothers who used paid family leave is 82%, compared to 64% among moms who quit their jobs during pregnancy.

Conclusion

Goldin’s research shed light on the gender disparities baked into the labor market that shape employment and economic outcomes, transforming how we think about women in the workforce. Because of her work, economists and policymakers are attuned to the barriers women face and can craft family-focused policies that help both women and men meet work and caregiving needs.