EXTRA: Nobel Laureate Claudia Goldin on "Greedy Work" and the Wage Gap

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Hey, People I Mostly Admire listeners.

I woke up this morning to the fantastic news that Claudia Golden had won the Nobel Prize in Economics.

I had the honor of having Claudia as a guest on this show back in 2021, and we thought we'd republish that episode as a bonus so you could hear about her groundbreaking work on women in the labor market.

I hope you enjoy my interview with Claudia, and we'll be back with a brand new episode of People I Mostly Admire on Friday.

My guest today is Harvard University economist Claudia Golden.

She spent almost 50 years researching the experience of women in the labor market, and she smashed through more than her own fair share of barriers along the way.

If you had ideas, if you were interested, if you could take the heat and there was a lot of heat, then you were a member of the inner group.

Welcome to People I Mostly Admire with Steve Levitt.

Claudia's pulled this research together into a book entitled Career and Family: Women's Century-Long Journey Towards Equity.

I've got so many questions for her, and the only thing I have to be on the lookout for is that sometimes people who study a topic for 50 years forget how little everyone else knows about the subject.

I've got to make sure our conversation stays understandable for lay people.

Claudia, it's so nice to talk.

It has been ages since we've seen each other.

So, you are probably the world's leading expert on the experience of women in the U.S.

labor market.

People talk about the gender wage gap.

When I was a kid, I remember from an early age seeing protesters carrying signs that said 59 cents on them.

Can you just explain where that number comes from?

How do we define the gender wage gap?

So, the BLS Bureau of Labor Statistics produces every year a single number.

You take all employed women on the one hand and all employed men on the other hand,

those that are

working full-time, 35 hours plus a week, full year, and then take the median, the income of the median woman and the income of the median man, and you divide those two numbers.

That's what gave you the 59 cents.

And that's what gives you about 82 cents now.

So what you can see is that it's a particular way of doing it.

There are things about it that are good because we're standardizing, but it's not fully standardized.

But in addition, we're chopping off the upper tail in some sense because we're using the median, we're not using the mean.

And it's also not taking into account any other factors like education or who chooses to be in the labor market or chooses to be out of the workforce.

Okay, but it's a number.

And 59 to 82, that seems pretty good.

Over what time period did that ratio increase that much?

So the ratio increased quite a lot in the 1980s and a bit in the 90s, and then it's slowly crept up a bit.

But what's interesting is that your memories, the 59 cents was the banner around 1970 or so, 1972.

And that

was stable for a very long time.

And then it started to increase by quite a lot.

Okay, so let's talk about a couple key things.

You talked already about the median versus the mean.

My sense is that at the top, women aren't doing nearly as well as they're doing in the middle.

Is that true or no?

It's absolutely true.

At the very top, the ratio, even correcting for a ton of things, becomes much lower.

It comes as a surprise to many journalists, for example.

They'll often say, oh, but it's worse at the bottom.

No, no, no.

In fact, if everyone made the minimum wage, then there wouldn't be any gap at all.

So there is a floor.

By construction, there would be 100.

Yeah.

But at the top, there is this incredibly long tail, and men are more in that long right tail than women are.

So in work that I've done on MBAs, we can see that initially when a group of men, group of women get their MBA and they leave and they take their first job, correcting for a number of things, the differences are really quite slight.

But after 10, 15 years, the differences widen enormously.

So women are making even below 60 cents on the male dollar.

Now,

as opposed to thinking about the bottom of the distribution, no one's really crying about someone who's making $250,000 versus $350,000.

So measuring the gender gap, that's an easy question.

I'm sure much harder is trying to explain the gender wage gap.

One story I hear all the time is about what economists call occupational gender segregation.

Can you explain to non-economists what we mean by that?

To most people, it means that if you looked at the fraction

of women in teaching versus the fraction of men in teaching, that it would be much higher for women.

So let's say 20% of women are teachers of those who are in the labor force, whereas only 5% of men.

And you did that for a bunch of occupations, and you would see that there are

different ways of measuring getting a single number

for the degree to which one group is more in one group of occupations than another.

And we call that a measure of segregation.

The word segregation, in some sense, implies that someone is being forced into a place where they are segregated.

Some of that could be true, but it's also the case that individuals will opt for positions

that may then look like they've been segregated, but they've segregated themselves.

And some of that would be because jobs have certain amenities and characteristics that you like.

And one of those characteristics could be that these are flexible jobs, that these aren't jobs that you can't control the hours of.

And in addition, they may be jobs that have a characteristic that they don't have that much dynamism or that they're not client-facing.

And therefore, if you leave for a while and then you return, the penalty isn't that great.

In the MBA jobs that we looked at, the penalties were very great.

In teaching, the penalties are less great.

And so women disproportionately went into teaching because it had many amenities.

You came home at 3 o'clock and your kids came home at 3 o'clock.

That was a big amenity.

So the idea behind that is there are some jobs that pay a lot, say like finance, and there's some jobs that pay a lot less, say teaching.

If women are doing the teaching and men are doing the finance, you could potentially explain a big chunk of the gender wage gap by that dimension alone.

So empirically, in the data, how important is this factor, men and women doing different jobs, how important is that for explaining the observed observed differences we see of wages for women and men?

So the first thing is that this measure of occupational segregation has declined quite a bit over time.

The second thing is that the differences in earnings within occupations

are very important.

In fact, they're

more important than the differences that occur because individuals are in different occupations.

Take lawyers, for example.

Some lawyers are working in big law firms.

They have big ticket clients.

And some lawyers are working in smaller law firms.

And they make very different incomes.

Whereas for, let's say, teachers, there's more uniformity.

If you had to take the full gap and how much of that overall gender gap is coming because men and women have selected different occupations.

From the calculations that I've done, it's about, I don't know, between 25 and 30 percent.

So it's much, much smaller than you would have thought.

Yes, so that explanation, which I've heard so much, the idea that men and women pick different sectors, really doesn't account for very much at all of the gap these days.

So that's not such an important explanation, partly because men and women aren't doing that different of jobs.

That's part of it.

Whereas if we did this calculation 40 years ago, 50 years ago, it would be much greater.

Aaron Powell, so what does explain the remaining two-thirds of the gender wage gap if it's not different choices of professions?

So it's really driven almost entirely

by this notion of greedy work and hours.

The greedy work notion, and I love the phrase, and it was a phrase that Claire Kane Miller used in an article in the New York Times when she was discussing my work.

And I looked it up, and it comes from a sociologist.

There are various ways of defining it, but let's just think of it as

if you double the hours, you more than double the hourly wage.

And we see that, for example, in work that I've done on lawyers.

You can see that lawyers working in firms that have much longer hours also have richer clients.

And in addition, the penalty that we

identify for any time out is enormously large.

So MBA women and MBA men, both of them, take a huge hit if they take time off.

But it may not be number of hours.

It may be which hours.

So you might work, let's say, 50 hours a week and someone else might work 50, but they're on call.

They're on call at night.

They're on call on the weekends.

If the supervisor says jump, they jump.

And that seems to be another way of defining greedy work.

So they're getting more per hour, not because they're putting in necessarily more hours, they're putting in particular hours.

And hours outside of their control.

That's right, outside of their control.

Or they controlled the fact that they decided that they were going to work a somewhat inflexible schedule.

And another piece of greedy work I would imagine is travel, business travel, where you're just told, oh, you have to be in Atlanta at 3 p.m.

on the 24th, and you just go to Atlanta.

And you don't say, oh, no, I actually can't because I don't have childcare.

You just show up in Atlanta.

Yeah, and Atlanta's close.

Tokyo is much farther.

And what about discrimination?

What amount does that account for?

There are people who've come up with evidence that could account for maybe 20% of the difference.

But if someone has

their point to make, they're going to emphasize that it accounts for more than perhaps someone else might.

I don't think we have hard, hard evidence on that, but we have a very good sense that women move into parts of the occupation that give them the flexibility and they pay for it.

Let's say we had a magic bullet that could immediately wipe out gender-based discrimination in labor markets.

My reading of your research is you don't think that would matter very much.

That's not really at the heart of why women and men are earning differently.

Yeah.

I think it matters in the sense that it would make people feel better.

I certainly do not want to be in a workplace where there's sexual harassment.

I do not want to be in a workplace where people feel cheated.

So I think many people, when they hear 82 cents on the dollar, they immediately assume it's discrimination.

Are people on either side of the political spectrum angry when they hear your explanation?

No.

No, in fact, I get lots of letters and emails, et cetera, that say right on.

It's interesting because in general, I haven't found that people are that interested in the truth, right?

So you, I think, are hitting on an explanation which feels true,

but I would still think that there are many people out there who'd like to say, no, it's discrimination.

The government should fix this because this is just the kind of thing governments can fix.

Well, part of it is because I admit that there are these other factors and I call them cockroaches and we should stomp on them.

We should call in a giant exterminator.

That's like sexual harassment and stuff like that.

Those are the cockroaches.

Yeah, those are the cockroaches.

Or, you know, real discrimination where you have two people who are doing exactly the same job and one is getting less than the other.

That should be gotten rid of.

But even if we get rid of it, we still have this other fact.

I term it the dirty truth.

It's the dirty truth that every woman knows in heterosexual couples, in which there are caregiving responsibilities, generally children, that women, at least for a while, step back a bit and do more of the care, and the men step forward and have more of the career.

It's really inequality within a household in the tasks that people do.

So one possibility is that more men could do more childcare.

Well, but let's go back to the economics.

If we think about one job is flexible and one job is somewhat greedier,

and if he decides that he's going to do more child care, they both take the flexible job, then you might make, let's say, $30,000 less a year for one of the individuals.

And the couple might say, well, it's not really worth that.

But why couldn't the woman do the greedy job, the man do the flexible job?

That would mean that we still have couple inequity, but we don't have gender inequality.

So, for example, same-sex couples, perfect.

They too will be faced, if they have kids, with

the issue of if there's a greedy job that pays a lot more, they'll have to sit down and figure out how much couple equity is worth to them.

But even if they jettison couple equity and one takes the greedier job and one takes the more flexible job, even if they jettison that, they haven't thrown gender equality under the bus.

It's only heterosexual couples that have the great ability to throw gender equality under the bus.

If we lived in a world in which

there was

a lesser sense of tradition, norms of that history.

And one could just simply call it the patriarchal history, which is founded both in terms of norms and traditions and in the

fact that the world used to be filled with brawn jobs, for which most men are better than women, although I must say that in my household, I do the brawn jobs.

But yes, if we can get rid of that, then we would be in a world in which even with greedy jobs, we would have couple inequity, but we would not have gender inequality within the couple and within the nation, within the economy.

Obviously, biology.

must have something to do with this, the fact that the woman carries the baby and breastfeeding.

Do you think that makes it inevitable that women tend to provide more early child care?

And then, once they've made that decision, then it makes sense to keep on the path?

Well, I don't think so.

In fact, I've heard from various people that

what we should have in terms of parental leave.

So, people in college graduate jobs in rich firms have parental leave.

But what is often the case is that they're given the parental leave at the same time.

So why not have a woman take the first, let's say, three months of parental leave, and then the man take the next three months of the parental leave.

One key root of this problem is that there are greedy jobs.

And so it's not easy for the one who's on the greedy job path to take that parental leave.

So it almost seems like the real solution is to get rid of these greedy jobs.

Do you see that as a possibility?

When I think about how to solve this issue, this difficult issue, I think of three different things.

One is the one that we were just talking about, which is to completely change gender norms.

That's probably the toughest one.

The second one is to change relative prices of caring for children.

And the third one is to change relative prices of the flexible versus the greedy job.

The whole problem is that the cost of flexibility is high.

It's almost like we have an amenity, clean air, and the cost of cleaning the air is just very high.

So if we had a technology that reduced the cost of cleaning the air, then the price of the amenity would go down.

So how could we lower the price of the amenity here, which is flexibility?

Well, one way is, let's say, that you are a pediatrician

and

you are on call every now and then and you don't have flexibility.

You form a group with other pediatricians.

And so you have a group of, let's say, five, and you cover for each other at times that are less inconvenient for you.

So it's a matter of having good substitutes.

By and large,

the greediness of a job is a function of how unique you are.

So my impression is that among the many disastrous consequences of COVID, one positive has been that it's really shown people how destructive greedy work is.

Because during COVID, there was very little greedy work going on.

It's okay when my toddlers are climbing all over me while I'm in a Zoom meeting.

Nobody really cares.

Something real has changed.

And the real thing that has changed is that many firms, many, many firms, including us in academia, have realized that you don't have to go to Tokyo to sign the M ⁇ A and you don't have to go to Zurich to negotiate the contract.

You can do these things from afar.

The firms are saving on the fact that they don't have to fly people all around the world as much, and nothing seems to be lost.

It certainly has been a game changer for individuals who couldn't travel.

So the young woman, for example,

who is getting her MBA and says, these are the jobs that I don't want to take, those jobs she now can take, and those jobs are in the higher end of the earnings distribution.

So I think you're absolutely right that there are both personal changes and fundamental, what we would call in economics, the technological changes that are game changes.

I really think if these changes stick, it will be transformative.

My prediction is that COVID ends up being the biggest factor that reduces gender wage inequality that we will have seen in 30 or 40 years.

Would you take the other side of that bet or would you take my side of that bet?

I'll take that side of the bet.

Okay.

All right, good.

So COVID's been this massive shock to work norms, but also with schools closed and daycare closed to parenting demands.

Do you know what the data say?

Did men or women absorb more of the extra child care workload?

So I did some calculations.

Various people did surveys.

And so we have some pretty good information that let's take once again, our college graduate couple, both full-time workers.

They have kids in elementary school.

Prior to COVID, she was doing 60% of the child care and 70%

of the housework.

Okay.

Okay.

When schools were closed, the sheer number of hours of child care and educational care doubled.

Tell me about it.

But it actually increased proportionally more for him than her.

But for her,

The number of hours went up so much.

I think of it like backpacking, that you can put your pack on and you can say, okay, it's heavy, but I can do the job.

And the other person has a lighter backpack and you're both walking along.

And then you double the load in your backpack and you more than double the load in the other person's backpack.

He can still walk and you are dead in the water.

That's what's interesting about it, that it really did increase the load for many men, but it increased the load for women to the extent that it became incredibly stressful to also keep down that job.

Now,

despite what many have claimed about what women did during the COVID era, they did not drop out of the labor force to that great a degree.

In fact, the very fact that they persisted, despite this additional weight in their backpack, meant that they were more stressed.

They didn't, by and large, drop out.

So I don't see a lot of obvious things that governments

can do to solve the gender wage equality gap.

Subsidizing child care seems like one of the obvious candidates.

But if you were president for a day, what would you do policy-wise to deal with this problem?

I'm not a policy person.

So policy-wise, remember I said there were three things.

One is changing the hearts and minds of people, which is always the hardest.

Yeah, so that's like, there's no law to pass on that.

But you can look at the history of some northern European countries and see that there is a sense that everyone is in it together.

Not only is there a sense in the nation as a whole that your kids are my kids and my kids are your kids, which is a very big and important difference in those countries versus the United States, but it's also within each family where in this together, we're going to carry this brick.

in our backpack together.

Governments are very good at changing relative prices.

And so changing the relative price for preschool, for example.

Preschool seems to me to be the win-win because it's not babysitting, it's learning.

We have some very good evidence that universal preschool is good for everyone.

So it is a win-win.

And what do you think about parental leave?

So maternity and paternity benefits, which are so much more generous in much of Europe than they are in the U.S.

Just to give you an example, so my wife is German.

In Germany, collectively, when you have a baby, the mother and the father get 14 months off of work paid.

So this is a giant set of questions.

It's probably the case that the best thing is certainly to have protected leave.

And 12 weeks of protected leave, which is what we have right now, is probably insufficient for the mother and for the child.

Paid leave is an important issue for individuals at the lower end of the income distribution for sure.

We as a nation should not want a mother to go back to work if she's not physically ready to go back to work.

We should not want her to leave her child if her child shouldn't be left.

Exactly how much paid leave leave we should have and how it should be funded is a separate set of issues.

Whether having, as was the case in Germany, three years of paid leave, which of course was rolled back to one year of paid leave and the ability to take leave,

has been pointed to by others as being detrimental to careers because there are many jobs, and we began this conversation with a discussion of those jobs in which taking

long leaves would be detrimental.

Yeah, but I thought these would protect you from that.

There are jobs where it's like hard to bail out, but if the government says, look, you have to let women bail out and those jobs are protected, women are allowed to come back.

I think many people would say, that should be really good for women because their jobs are protected.

Now they can do these greedy careers.

But you're saying, no.

That's wonderful in a static world, but generally you have these things called promotions and advancement.

Yeah.

You're listening to People I Mostly Admire with Steve Levitt and his conversation with Claudia Golden.

After this short break, they'll return to talk about what revolutionized the female labor market.

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I have to say, Claudia's answers genuinely surprised me.

I'd never even heard the term greedy work before, but it makes so much sense the way she explains it.

In the second half of the interview, I want to ask Claudia about her own personal experiences.

The economics profession does not have a very good track record when it comes to the treatment of women, and Claudia was one of the very first women to rise to the top of the profession.

Also, one of Claudia's research papers ranks among my all-time favorites.

I have to make sure she doesn't get out of here without us talking about it.

So I want to give a little quiz to my listeners.

Okay, listeners, two questions.

Question number one,

in what year do you think the University of Chicago Department of Economics first gave tenure to a female professor?

Okay, so take a minute and think about that.

And then question two,

in what year did the Harvard Department of Economics first grant tenure to a female economist?

If your guesses are locked in, then I want to see how Claudia does on this quiz.

So Claudia, let's start with the U of C.

When was a woman first tenured in the economics department there?

I believe it was Hazel Kirk.

I think it was like 1924.

Okay, 1924.

Okay.

So how about Harvard, renowned for its thought leadership and progressive values?

When was the first woman granted tenure in economics there?

1990.

And who would that be?

Me.

That was you.

Okay.

Isn't it amazing?

So I believe that I had the first tenured appointment, which I didn't accept at Princeton, which I was denied tenure long before that, but that's okay.

Also Caltech, also the University of Pennsylvania.

So in fact, I believe that I had the first tenured appointment in four institutions.

Wow.

I think the younger people who are hearing this will just be shocked by these numbers, by these facts.

It's in large part because there were very few women in economics, and that creates a culture in which you feel as if perhaps you don't belong.

But in fact, when I was a graduate student at Chicago, and despite the fact that there was a tenured woman on the faculty who was emeritus, Margaret Reed, There were two women in my class of about 40 or 50 men.

And yet I never, ever felt odd.

I was taught by the greats, by Milton Friedman,

Gary Becker, by Les Telser, by Ronald Coase, by Bob Fogel.

And I always felt that I had a seat at the table, always.

It's interesting and heartwarming to hear that's true because you're a sensitive and intuitive person.

I know you well and I would have expected you to say something very different, which is that it was incredibly hard being such a drawblazer and that you paid enormous costs along the way.

But that's not the way you feel.

Not at all.

I just felt that Chicago was the place that if you had ideas, if you were interested,

if you could take the heat and there was a lot of heat, then you were a member of the inner group.

That's great to hear because I think there is a general sense that economics has been inhospitable to women over time.

I've seen that myself, but it's good to hear that, at least in your case, you felt like economics treated you fairly and treated you on the quality of your ideas, not on your gender.

Maybe that's Chicago.

I hope so.

So one of the subjects that you've researched is the evolution of the choice of profession by women.

And the facts are really shocking.

Would you happen to know off the top of your head, in say the 1950s, what share of college-educated women were teaching or in nursing?

Yeah, so

of college-educated women around that period, around

60%

were in a limited number of fields like teaching, nursing, library, social work.

It's very high.

Do you have a sense of what share of lawyers and doctors were females, say, in the 1950s?

Doctors were always a little bit higher than lawyers.

So lawyers would have been probably around 5% or something, 7%.

Doctors would probably hover around 10%.

Okay, so let me throw out another little quiz to my listeners.

What was it that happened in the late 1960s and early 1970s that caused this incredible influx of women to law, medicine, and similar professions?

The birth control pill.

It was something that enabled and sparked women to be able to marry later in life.

And that something that happened was not just the invention of the birth control control pill, but the ability for young single women to get the pill.

So if we took a group of college graduate women in the 1960s, the vast majority of them were going to get married within a year or two of graduation.

The median age at first marriage for a college graduate was 23.

Wow.

So that doesn't leave a lot of time

to go off on your own and decide I'm going to get a law degree in a particular place.

And so you need three, four, five years.

Let me just give you one example, which is Ruth Bader Ginsburg.

Ruth and Marty met when they were undergraduates at Cornell University.

They were in many ways typical of their group.

They married right after college graduation.

They went both to Harvard Law School.

They had a child very soon after.

And Ruth did a lot more of the child care.

When Marty decided that he wanted to go to New York to start his illustrious career, Ruth transferred from Harvard to Columbia, even for someone who's among the most famous women of our age, she married very early.

Of course, she bucked the tide and managed to get on the Supreme Court.

And so you call the availability of the pill for young single women the quiet revolution.

Why do you call it that?

Because there was a noisy revolution at the same time.

And the quiet revolution is what people do in the privacy of their own homes.

Of course, what I meant in that piece that I wrote called The Quiet Revolution wasn't simply what sparked it, but the fact that the quiet revolution isn't that labor force participation is increasing, it's that what women are doing changed an enormous amount.

So they could invest in being a lawyer or a doctor or an MBA or get a PhD, that they had this freedom and ability to do that without potentially, they thought, any loss, that they could pursue career first

and then get the family.

In the 1970s, having lots of kids seemed to be the easy part.

Having a career seemed to be the almost impossible part.

And how radical and how fast were the transformations in the kind of jobs women were seeking once birth control became available to them?

So the changes in the fraction

of lawyers, doctors, PhDs in various fields that were female increased astronomically.

It's these occupations for which you do a lot of the upfront investment and then you enter.

So you're an economic historian.

And one thing that surprised me over and over again as an economist is how difficult I find it to talk to historians, not economic historians, but people trained purely as historians.

And I have a hypothesis that I'd like to test out on you in that regard.

Okay?

Sure.

So economists, in my view, they love simple, universal explanations.

A good, in quotes, a good economic model, it strips away all of the context that distracts you from the core issues of human behavior and decision-making.

Historians, on the other hand, they love complexity.

So the best history writing is full of specific details about individuals, about the particular institutional features that triggered this or that change at this exact time.

So my experience is that the economist's approach and the historian's approach is like oil and water.

Do you think there's some truth to that characterization?

And if so, how in the world, as an economic historian, have you been able to bridge that gap?

So let me put it a slightly different way.

We believe in markets.

Economists believe in markets.

Yes.

Historians believe more in power relations.

That doesn't mean that we don't believe in some power relations.

But most importantly,

we believe in markets.

And by and large, for most historians, this is a form of dark magic.

We are sorcerers.

For them, there are people, and people engage in power relationships.

That is the essence of the difference.

I bring to history, to my understanding of history, this

notion of the market.

Of course, we know the market works, but the market is in the vapors.

You can't touch it.

You can't feel it.

You can't read it.

You can't find it in an archive.

Why the price changed?

The other big difference is that

we want causality.

And this change in history, we can think of it as when Bob Fogel wrote his book on the railroads and how that set history on fire.

Because he took the writings of historians who said the railroads were essential to American economic growth, that simple statement, and he turned it around as a logical statement and he said, therefore, what you're saying is,

if not the railroads, then not economic growth.

So I will remove all the railroads, and I will show you that there would have been economic growth because

everything is marginal.

Even something as large as the railroads, I can make into a marginal decision.

So I always like to ask my guests for advice.

And in particular, I'd love to hear your advice to young women making career choices today.

So the advice that I give to women is that we're often told that we don't negotiate well with our employers.

The most important negotiation you can do is with the person, man or woman, with whom you're going to spend the rest of your life.

If you like what you heard today, pick up Claudia Golden's book, Career and Family, Women's Century-Long Journey Toward Equity.

Thanks for listening, and we'll see you back here with an all-new episode this Friday.

People I Mostly Admire is part of the Freakonomics Radio Network, which also includes Freakonomics Radio, No Stupid Questions, and The Economics of Everyday Things.

All our shows are produced by Stitcher and Renbud Radio.

This episode was produced by Morgan Levy and mixed by Jasmine Klinger.

Our theme music was composed by Louise Scara.

We can be reached at Pima at Freakonomics.com.

That's P-I-M-A at Freakonomics.com.

Thanks for listening.

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