# 2023 Nobel Prize in Economics: Why the gender pay gap opens with the first child > The 2023 Economics prize honours Claudia Goldin for explaining two hundred years of women and work. By rebuilding US data that had quietly undercounted women, she showed that female participation in paid work traced a U-shape rather than a steady climb, and that today's pay gap opens not at hiring but after the first child, driven by jobs that overpay long, inflexible hours. - Laureates: Claudia Goldin (share 1, Harvard University, Cambridge, MA, USA) - Official citation: “for having advanced our understanding of women’s labour market outcomes” - Course page: https://nobelexplained.com/economics/2023-gender-pay-gap - Last updated: 2026-06-21 ## Explained simply (ELI5) Imagine lining up every working-age woman in America over the last two hundred years and asking, decade by decade, how many were doing paid work. You might guess the number just kept rising as the country got richer. It did not. It dipped first. On farms, women worked all day. When factories took over, married women were pushed out of paid jobs, so the number **fell**. Later, as offices, shops, schools and hospitals grew, women came **back**. Drawn out on a chart, the trend looks like the letter U. > **A pay gap that starts with a baby** Today a man and a woman can leave the same school, take the same job, and earn the same pay. The gap between them mostly opens after their first child, because someone has to cut back to flexible hours, and that someone is usually the mother. Goldin's real gift was the digging. She rebuilt two centuries of records that had quietly logged farmers' wives and home weavers as having no job at all, and only then could the true picture appear. ## Explained for undergraduates Claudia Goldin is an **economic historian**. To study women and work she did something unglamorous and decisive: she went into 200 years of US archives and rebuilt the data, because older records often logged a farmer's wife or a home weaver as having no occupation. With cleaner numbers a clear shape appeared. Female labour-force participation did not climb steadily with economic growth. It traced a **U**. In the early 1800s, as the economy moved from farms to factories, married women's participation fell, held down by social norms and a labour market rebuilt around male industrial jobs. From the early 1900s, as clerical and service work expanded and schooling spread, women returned. Growth on its own, Goldin showed, does not draw women into paid work; the kind of work and the norms around it decide. > **The power of the pill** In the late 1960s the contraceptive pill gave young women direct control over the timing of children. Because US states granted young women access in different years, Goldin and Lawrence Katz could compare otherwise similar groups. Women with early access delayed marriage and childbirth, invested in long professional training, and entered law, medicine and business in far larger numbers. Yet a gap remained. In rich countries women are now often more educated than men and equal-pay laws exist, but women still earn roughly **10 to 20 percent** less. Goldin, with Marianne Bertrand and Lawrence Katz, traced where this gap comes from. At graduation, pay is nearly equal. It is parenthood that bends the two paths apart: after the first child, mothers' earnings drop and then grow more slowly, even when the mother and father hold the same degree and the same job. - **Late 1700s to early 1800s**: Farm economy: many married women work on family land, though the records rarely count it. - **1800s**: Industrialisation pushes married women out of paid work; participation falls to the bottom of the U. - **Early to mid 1900s**: Clerical and service jobs, plus more schooling, draw women back into the labour force. - **Late 1960s**: The contraceptive pill lets women time childbirth, reshaping their education and career choices. - **2010 onward**: Goldin and co-authors pin the remaining gap on parenthood and inflexible work, not on hiring discrimination alone. ## Explained for experts Goldin's contribution is empirical and historical rather than theoretical. Her raw material is more than 200 years of US data on women's earnings and employment, much of it reconstructed from sources that systematically undercounted female labour. Correcting that measurement error was itself a result: a large share of married women's work in the agrarian and early industrial economy had simply gone unrecorded. > **Why growth did not lift women into work** Plotting corrected participation against time, Goldin found a U spanning the period from the late eighteenth century. Married women's participation declined through early industrialisation, as production left the home and norms cast paid work as incompatible with marriage, then rose through the twentieth century with the service sector and rising education. Because output per head grew throughout, the U breaks any simple one-directional link between development and female employment. For the modern rise she identified a specific lever. In **'The Power of the Pill'** (2002), Goldin and Lawrence Katz used the staggered timing of US state laws granting young, unmarried women access to oral contraception as a natural experiment. Cohorts with early access delayed marriage and first birth and invested in professional degrees, which helps explain the surge of women into law, medicine and business from the 1970s onward. > **Where the gap actually opens** Goldin, Bertrand and Katz (2010), studying Chicago MBA graduates, showed that male and female earnings start almost equal and then diverge sharply after the first child. The mother's hours fall and her pay grows more slowly, even at the same education and occupation. Across high-income countries the residual gap of 10 to 20 percent is now explained largely by this motherhood effect rather than by hiring discrimination or differences in schooling. The mechanism she named is **greedy work**. Many high-paying jobs pay disproportionately more for long, continuous, on-call hours, so two parents cannot each hold one without sacrificing the care of their children. The household specialises: one parent, usually the father, takes the greedy job, while the other, usually the mother, takes flexible, lower-paid work. The gap, in this account, is less a matter of men versus women than a tax on whoever supplies the flexibility. > “If we want to eradicate or even narrow the pay gap, we must first plunge deeper toward the root of these setbacks and give the problem a more accurate name: greedy work.” > (Claudia Goldin, Career and Family (2021)) **What the prize established** - Female labour-force participation follows a U over 200 years, so economic growth alone does not draw women into paid work. - Much of women's historical work was unrecorded, and correcting the data changed the picture of the past. - The contraceptive pill, identified through a natural experiment, accelerated women's entry into long professional careers. - The modern gender earnings gap opens after the first child, not at hiring, and persists across the same degrees and occupations. - Pay structures that reward long, inflexible hours, what Goldin calls greedy work, convert that childcare asymmetry into a durable pay gap. ## Think first **Q:** Across two hundred years, as the United States grew steadily richer, did the share of women in paid work simply rise the whole time? **A:** **No. It traced a U.** On farms most women worked, so participation started fairly high. As factories took over in the 1800s, married women were pushed out of paid jobs and the number fell. Then offices, shops, schools and hospitals grew through the 1900s and women returned. Growth alone does not pull women into work; the kind of work and the norms around it decide. **Q:** A man and a woman leave the same school, take the same job, and start on the same salary. A few years later he clearly earns more. What changed? **A:** **A child arrived.** Goldin found that starting pay is nearly equal. The gap opens after the first child and keeps widening, because the parent who shifts to flexible hours, usually the mother, gives up the premium that demanding jobs pay for long, always-available work. ## The pay gap is mostly a parenthood gap In high-income countries women now often hold more education than men, and equal-pay laws are on the books, yet women earn roughly 10 to 20 percent less. Goldin showed that men and women with the same degree and the same job start out paid almost the same. The gap opens only after the first child, so parenthood, not the hiring desk, explains most of what remains. ## Key terms - **U-shaped participation curve**: Goldin's finding that the share of US women in paid work fell during nineteenth-century industrialisation and rose again in the twentieth century, rather than climbing steadily with economic growth. - **Gender earnings gap**: The difference between what men and women earn on average. In high-income countries it now runs roughly 10 to 20 percent, even where women are as educated as men. - **The parenthood effect**: The pattern, documented by Goldin and co-authors, in which men's and women's earnings start nearly equal and diverge after the first child, even at the same education and occupation. - **Greedy work**: Jobs that pay disproportionately more for long, continuous, on-call hours. Because flexibility is sacrificed by whoever handles childcare, usually the mother, this pay structure widens the gender gap. - **Natural experiment**: A study design that uses real-world variation, such as US states granting young women access to the contraceptive pill in different years, to compare otherwise similar groups as if they had been assigned by chance. ## Check yourself 1. Over 200 years, what shape did women's US labour-force participation trace? - A steady upward line - **A U-shaped curve** (correct) - A flat line - A steady downward line - Why: Goldin's corrected data show a **U**. Participation fell as the economy shifted from farms to factories in the 1800s, then rose as service work and schooling expanded in the 1900s. Steady growth did not produce a steady climb. 2. According to Goldin, when does most of today's gender earnings gap open? - At hiring, from unequal starting salaries - **After the first child arrives** (correct) - When women choose less education - It has stayed constant for centuries - Why: Studying graduates with the same degrees and jobs, Goldin and her co-authors found that starting pay is nearly equal. The gap opens and widens **after the first child**, as the mother shifts to flexible, lower-paid hours. 3. What does Goldin mean by 'greedy work'? - **Jobs that pay disproportionately more for long, inflexible, always-available hours** (correct) - Jobs that underpay everyone equally - Jobs that are legally closed to part-time workers - Jobs that only men are allowed to hold - Why: Greedy work pays a steep premium for long, continuous, on-call hours. When one parent has to be flexible for childcare, usually the mother, that parent forgoes the premium, which turns a care imbalance into a lasting pay gap. ## The laureates ### Claudia Goldin Born in New York in 1946, Goldin is an economic historian and labour economist at Harvard University. She spent years in the archives reconstructing more than 200 years of US data on women's work, much of which older records had hidden or miscounted. In 2023 she became the first woman to win the economics prize on her own. ## Sources - [The Prize in Economic Sciences 2023, popular science background (NobelPrize.org)](https://www.nobelprize.org/prizes/economic-sciences/2023/popular-information/) - [The Prize in Economic Sciences 2023, press release (NobelPrize.org)](https://www.nobelprize.org/prizes/economic-sciences/2023/press-release/) - [Claudia Goldin (Wikipedia)](https://en.wikipedia.org/wiki/Claudia_Goldin) --- From Nobel Explained (https://nobelexplained.com), a free, independent course on every Nobel Prize since 2020. Not affiliated with the Nobel Foundation. Facts are pinned from the official Nobel Prize API.