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  5. A woman's chance for equal pay plummets when she has a kid — and never recovers, says the newest Harvard economist to win the Nobel Prize

A woman's chance for equal pay plummets when she has a kid — and never recovers, says the newest Harvard economist to win the Nobel Prize

Juliana Kaplan   

A woman's chance for equal pay plummets when she has a kid — and never recovers, says the newest Harvard economist to win the Nobel Prize
  • Harvard professor Claudia Goldin just won the Nobel Prize in economics, the third woman to do so.
  • Goldin has been studying women's labor and the gender wage gap for decades.

What's the major reason a woman might get paid less than men in the same field, and with the same education? Kids.

We know this thanks to decades of research by Claudia Goldin, who just won the Nobel Prize in economics.

Goldin, a Harvard professor, has now become the third woman to win the prestigious prize. Her latest publication — titled "Why Women Won" — focuses on pivotal moments in women's rights history. Goldin told Insider that having her research recognized is important "because it's about both women in the labor force, and about gender and the economy."

"Those are two sets of issues that we know are important, and they don't get talked about enough," she said.

Some of Goldin's most pivotal research looks at one of the big disconnects in the economy: Why earnings gaps still exist in high-income countries, even as women are increasingly better educated than men and working commensurate jobs.

The answer, it turns out, is what's called the motherhood penalty. Goldin, alongside Lawrence Katz and Marianne Bertrand, found that wage gaps are small at the onset of careers for men and women in similar fields and with similar experience. Indeed, in some metro areas, Gen Z and millennial women are out-earning their male counterparts.

However, that narrative flips, and Goldin's research determines why. A 16-year-long analysis of graduates from a top MBA school finds that female MBA graduates who have children are more likely to have less job experience, more interruptions to their careers, and earnings decline — something that's not the case for their male counterparts.

As the Nobel committee explains, "as soon as the first child arrives, the trend changes; earnings immediately fall and do not increase at the same rate for women who have a child as they do for men, even if they have the same education and profession."

In essence, when women have children, their hours and earnings drop. That's the motherhood penalty. When men have kids, though, they're more likely to work even more hours and make more money — meaning they benefit from a fatherhood wage premium, as Pew Research finds. In 2022, women ages 25 to 34 earned 92% of what men the same ages made, per Pew. But women ages 35 to 44, who are in the peak age group for parenthood, made just 83% of what men the same ages took home.

That's a gap that can follow women throughout their careers even when their kids get older, Goldin and economists Sari Pekkala Kerr and Claudia Olivetti found. Women do make up some ground once their kids are out of high school; they clock in for more hours, and their "motherhood penalty" is chipped away at. But that doesn't mean they're commensurate with their male counterparts.

"By the time that women reach their mid fifties — I'm thinking especially about the college-educated women — the gains that men and fathers in particular have made in the labor market are so large that no matter what you do at that point, you can't make that ground up," Kerr, an economist at Wellesley College who co-authored that paper with Goldin on the "parental gender gap," told Insider. Mothers can make up ground relative to non-mothers, Kerr said, but "the gender gap is just way too large between parents."

For economics, having Goldin recognized like this means validation of the field that she's helped foster and mentor, Kerr said, and the hundreds of researchers who are chipping away at these topics. It also means that the question of the pay gap is now "officially recognized as a big key question" in economics.

"There are lots of people doing such research now, and I think that this means that they'll see that it is important and that it's recognized," Goldin said.


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