Why women drop out of work

The Nobel Prize in economics this year awarded to Claudia Goldin signifies that economics is not just about finance but equally about social issues, usually considered the domain of sociology.

Her prize motivation- “For having advanced our understanding of women’s labour outcomes” symbolises the victory of women challenging male-centric narratives and turning the lens of economics on women.

Goldin’s work has not only reshaped the our understanding of labour markets but also advanced the cause of gender equality.

Goldin’s analysis of 200 years of US data show that there is no linear relationship between growth and female labour force participation rate.

Three stages

In the three stages Goldin observes, Stage I encompasses the motivation of getting into paid work and attaining higher education. Stage II is about finding a respectable job and the last stage is the decision making of continuing the work post marriage which involves the burden of household responsibilities too.

Women in India also go through these stages. In India a young girl is likely to drop out of the labour force like her mother and lacks an incentive to get into higher education.

The decision to attain higher education and work is constrained by her family’s choice, marriage, and income effect. Post marriage this decision making ability is passed on to her husband and in-laws.

Goldin in her recent book “Career and Family: Women’s Century-Long Journey to Equity,” explained wage-pay gap

through the concept of “Greedy jobs” — jobs that entail high rewards but demand higher time and attention like — lawyers, doctors, corporate executives etc. Women’s traditional role as homemakers results in her career taking a back seat.

Her research demonstrates that the pay gap narrows significantly when women and men work in professions with more flexible hours and opportunities to combine work with family life. Further, she used “human capital” as a way to understand the economic value of skills, experience, and education. Her insights have played a crucial role in encouraging women to pursue careers in fields traditionally dominated by men, such as science and technology. Goldin played a major role in the advancement of oral contraceptive pills which is a trailblazer in the field of reproductive rights and women’s economic empowerment.

Goldin in her research shows that it is not marriage but child birth that forces women to drop out of the labour market, what she calls ‘Motherhood penalty’.

By reducing unintended pregnancies and enabling women to time and space their births, contraceptive pills have contributed to better child-rearing practices, improved maternal health, and smaller family sizes, all of which have a positive impact on overall economic independence and development.

Goldin’s work on ‘sticky floors’ and ‘glass ceilings’ that women face in their careers is pertinent in the Indian context, where there are still significant barriers to women’s advancement in the workplace. How many women do we see in the top echelons of corporate and government sectors?

Undoubtedly, women’s reservation in the Indian Parliament is a great victory in breaking this glass ceiling and having a better representation of this one-half. How relevant is Goldin’s work for India needs more research.

The solutions

Reliable and safe transportation systems, accessible and affordable childcare centres are crucial for working mothers. Flexible work arrangements such as remote work and parttime options to accommodate women’s responsibilities at home, adequate maternity and paternity leave — encouraging shared family responsibilities, a well-developed care economy are needed to boost women’s participation and empowerment in the country.

In India, women are disproportionately employed in lower-paying, often informal sectors involved in home-based work. We have made strides in improving girls’ access to education, but there is still work to be done to ensure that women have equal opportunities to develop their skills and contribute to the economy.

Overall, Claudia Goldin’s seminal work in gender economics holds immense relevance as ‘Nari Shakti’ is the harbinger of women-led development during the Amrit Kaal.

The writer is with the Economic Advisory Council to the Prime Minister. Views expressed are personal.

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