Nobel Economics Prize 2023

The Nobel Memorial Prize in Economic Sciences has been awarded to Claudia Goldinfor having advanced our understanding of “women’s labour market outcomes.”

• The Royal Swedish Academy of Sciences in Stockholm has been given this award.
• Claudia Goldinhas worked in creating “the first comprehensive account of women’s earnings and labour market participation through the centuries”.
• She is one among the other three women got the Nobel Prize for economics since its inception.

• Despite decades of progress, women remain underrepresented in the workforce and earn less than their male counterparts.
• Goldin’s analysis of more than 200 years of U.S. labor force data shows how employment rates and the gender wage gap depend not just on the economy but also on evolving social norms related to women’s education and roles in the home and family.
• Her Contribution:
  • Goldin’s work pushes back against long-held notions that a strong economy and technological advancements would be enough to pull women into the workforce.
  • Her research found that a large share of married women — nearly 60 percent were in the workforce in the 1790s, when much of the U.S. economy was built on agriculture.
  • But women’s labor force participation declined dramatically in the 1800s with the rise of industrialization, which made it difficult for them to juggle outside work with domestic responsibilities.
  • Her research also explores the reasons for stubborn wage gaps between men and women, including pay discrimination and parenthood.
  • Although in the past, the gender pay gap was mostly related to differences in education levels and career choices, study has shown that pay inequities persist among men and women in the same jobs.
  • Women, she found, take an immediate hit to their earnings after the birth of their first child, when many are forced to scale back their hours or forgo advancement opportunities because they handle the bulk of child care.

Understanding Women’s Role in Economy in India:

• The economic role of women in India has traditionally been limited, with many women facing cultural, social, and economic barriers that prevent them from fully participating in the workforce. However, in recent years, there has been a growing recognition of the important role that women play in the Indian economy.
• The present contribution of women to the National GDP is around 18%.
• Sector-wise contribution:
  • In India, women comprise 48% of the agricultural workforce and own only 13% of the land.
  • Women in India constitute around 20% of the manufacturing workforce and around 30% of the total workforce in the services sector.
  • At present, there are 432 million women of working age in India, out of which 343 million are employed in the unorganized sector.
• India has the 3rd largest ecosystem in terms of Startups in the world, and 10% of them have been led by women founders.
  • Also, research shows that ventures started by women are more sustainable in nature.
• In 2022, a survey among 250 Indian companies revealed that the share of women in the Chief Executive Officer or Managing Director roles has increased by 55% which reflected significant growth in their role in driving the economy.

What are the challenges faced by working women?

• Pay Disparity: While the World Inequality Report of 2022 noted that men earn 82% of the labour income while women earn 18% of it.
• Sexual harassment: Despite the 2013 Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act in place, a data analysis compiled by Complykaro.com, an anti-sexual harassment advisory witnessed a rise in workplace sexual harassment complaints by 27% in March 2022.
• Pregnancy discrimination: Women still feel apprehensive about starting a family as it affects their careers. The Maternity Benefit Act, Sec. 5(3), states that a minimum of 14 weeks of paid leaves be provided to a new mother.
  • Yet women face unfair treatment at work like stereotyping, intrusive comments, and even a lack of relevant projects being handed to them.
• Imposter syndrome: It is a self-doubting tendency that leads an individual to feel skeptical and underserving of their accomplishments.
  • A 2020 KPMG study revealed that almost 75% of female executives across industries have faced imposter syndrome. While almost 47% of female executives were in disbelief about reaching their level of success.
• Ignorance and lack of sensitivity: Female health that most men in our society are unaware of the pain most women undergo during their menstrual cycle

Impacts:

• Less diversified Skills: Women and men bring different skills and perspectives to the workplace, including different attitudes to risk and collaboration.
  • Lack of women participation makes the skill-set limited.
• Production: Adding more women to the labor force should bring larger economic gains than an equal increase in male workers (reflecting the fact that, in economists’ jargon, the elasticity of substitution between women and men in production is low).
• Lesser growth or stagnant growth: Because women bring new skills to the workplace, the productivity and growth gains from adding women to the labor force (by reducing barriers to women’s participation in the labor force) are larger than previously thought.

What measures could help enhance the role of women?

• Improving access to education: By increasing access to quality education for girls, as well as education and training programs that help women to develop the skills they need to participate in the workforce.
• Providing support services: Support services such as affordable childcare, healthcare, and transportation can help women to balance the demands of work and family life.
• Encouraging women's participation in leadership roles: Initiatives to promote women's leadership in politics, business, and other fields, as well as mentoring and networking programs that help women to develop the skills and connections they need to succeed.
• Addressing discrimination and bias: This includes efforts to combat discrimination and bias in the workplace, as well as in other areas of life.
• Encouraging community participation: Encouraging community participation and creating an enabling environment for women to take on leadership roles through creating platforms for dialogue, capacity-building, and networking.