Richmond Fed Interview: Claudia Goldin

This is the first part of an interview of Claudia Goldin by the Richmond Fed (later she also talks about her work on education and inequality, among other things):

Econ Focus: Much of your work has focused on the history of women's employment in the United States. You've described the past few decades of that history as a "quiet revolution." What do you mean by that?

Goldin: The quiet revolution is a change in how young women perceive the courses their lives are going to take. One of the places we see this is the National Longitudinal Survey, which began in 1968 with women who were between 14 and 24 years old. One of the questions the survey asked was, "What do you think you're going be doing when you're 35 years old?" In 1968, young women essentially answered this question as if they were their mothers. They would say, "Well, I'm going to be a homemaker, I'm going to be at home with my kids." Some did say they would be working in the labor market, but the fraction that said they would be out of the home was much smaller than the fraction that actually did end up working outside the home.

But as these women matured and as successive cohorts were interviewed, their perceptions of their futures, their own aspirations, began to change. And so their expectations when young about being in the labor force began to match their actual participation rates once they were older. 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.

EF: What changed in society that allowed this revolution to occur?

Goldin: 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.

EF: What happened during previous periods of change in women's labor force participation?

Goldin: A large fraction of employment in the early 20th century, outside of agriculture, was in manufacturing. And manufacturing jobs were not particularly nice jobs. White-collar jobs in offices greatly expanded in the 1910s and 1920s, but they required one to be literate and possibly numerate, and women who were older at the time would not have had the education to move into those jobs. And so there developed a social norm against married women working. It was OK if you were single, it was often OK if you were an immigrant or African American, but it wasn't OK if you were an American-born white woman from a reasonable family, especially if you had kids.

New technologies further increased the demand for white-collar workers, and the high school movement produced a huge increase in women's education during the early decades of the 20th century. More positions were created that were considered "good" jobs, those that young women could start after high school and keep after marriage with far less social stigma.

The income effect and the substitution effect come from a set of preferences. If individual families have more income in a period when there are various constraints on women's work, they're going to purchase the leisure and consumption time of the women in the family, and the income effect will be higher. But if well-paying jobs with lower hours and better working conditions open up, then the income effect will decrease and the substitution effect will increase and both will serve to move women into the labor force. ...