Photography by Bryce Vickmark
Delight in discovery
Economic historian Claudia Goldin, AM’69, PhD’72, takes a detective’s joy in gathering clues, analyzing data, and reconstructing the stories behind social issues.
Claudia Goldin thinks of herself as Sherlock Holmes. With titles like Understanding the Gender Gap and The Regulated Economy, her case file lacks the criminal flavor of Sir Arthur Conan Doyle’s oeuvre, but Goldin, AM’69, PhD’72, brings a sleuth’s methods to complex puzzles of economic history. How did urban slavery work? What effect did the Great Depression have on the labor force? What caused government corruption in the United States to recede over the 20th century? How do technology and education affect income inequality? And her most famous case, why do women make less money than men? Since 1990 Goldin has pursued these questions at Harvard University, where she’s the Henry Lee Professor of Economics and was the first woman granted tenure by her department. Why does she identify with Holmes? “You can see his mind at work. He goes out into the really dirty part of the town and lives there and hangs out and gets to know the ‘street Arabs.’ He collects all this and then sits down and comes up with a theory to help him solve the problem. That’s what I do.” A labor economist and economic historian, Goldin excavates clues from the past, working the archives instead of the streets, to illuminate social issues of today and yesterday. From the beginning of her career, the hunt for data has engrossed her. Lawrence Katz—Goldin’s partner, Harvard colleague, and frequent research collaborator—tells how as a graduate student Goldin traveled to several archives in the South to gather data. When she got back, her dissertation director, University of Chicago professor Robert Fogel, asked for the receipts from her expenses. She told him she had none. “He said, ‘Well, how did you get from Raleigh to Durham?’ She’d hitchhiked or found rides. She almost always seemed to run into someone at an archive who let her stay at their place.” At Goldin’s insistence, she and Katz traveled to the Midwest to research their book The Race between Education and Technology (Harvard University Press, 2008), which examines how public education took shape in this country, spreading from urban to rural areas in the early 1900s. They visited some of the high schools that were pioneers in early 20th-century education. “We got to see the expansion of education in places like Iowa and Nebraska,” Katz says. Goldin loves to get out in the field and see how people work, like an economic ethnographer, or a detective finding clues. In a recent address to the American Economic Association (AEA), of which she was president in 2013, Goldin paused after presenting her data to say, “Holmes at this point sends out Watson for a lot of tobacco, fills the room with smoke, thinks, and comes up with a theory.” Her investigations span many subjects, with a common thread of how people have engaged in the economy over time. In a field where more prestige is accorded to quantitative approaches and economic theory, Goldin is one of the few economic historians considered among the elite (others are Avner Greif at Stanford, Joel Mokyr at Northwestern, and Barry Eichengreen at the University of California, Berkeley). Her book Understanding the Gender Gap: An Economic History of American Women (Oxford University Press, 1990) remains the foundational work on the rise of women in the US labor force and the impact of that movement on the economy. It’s research she continues to build on. “She’s been effective at making economic history relevant,” says Edward Glaeser, PhD’92, the Harvard urban economist who coedited a book on the economics of corruption with Goldin. Glaeser calls The Race between Technology and Education one of the four or five most important books in economics in the past 50 years. No one can touch her work on gender, the family, and their relation to skills, he adds. “Everything I know about the changing nature of women [in the economy], I know from her or one of her students.”   As a child growing up in a science-loving household in a lower-middle-class Bronx neighborhood, Goldin thought she’d be a different kind of detective. Heavily influenced by Paul de Kruif’s The Microbe Hunters (Harcourt, Brace, and Company, 1926), she dreamed of becoming a bacteriologist. Her ambitions were reinforced at the Bronx High School of Science, from which she graduated in 1963. She thought she knew everything. “Here I’m from the Bronx,” she remembers, and “I could maneuver around very difficult terrain. I could find a bathroom at the Waldorf Astoria and have no one stop me. I knew how to get around. I was street-smart.” That fall the family drove to Ithaca in the Plymouth that was her father’s first car. While they waited to unload Goldin’s things, a young woman climbed on top of her family’s Mercedes a couple of cars ahead. “She was waving her arms and she said, ‘This is so Machiavellian.’ And I thought to myself, I do not know anything.”
Goldin directs the Development of the American Economy program at the National Bureau of Economics Research. (Photography by Bryce Vickmark)
She determined to drink in as much of the liberal arts as she could at Cornell: humanities, political science, history, and an industrial organization course with the economist Alfred Kahn. A charming showman in the classroom who would later become known as the father of airline deregulation, Kahn captured her imagination. Economics became her course of inquiry. In 1967, still interested in industrial organization, which she had written her thesis on, Goldin went to the University of Chicago for graduate school. She was pulled there by the presence of faculty like George Stigler, PhD’38; Ronald Coase; Lester Telser, AM’53, PhD’56; and Sam Peltzman, PhD’65, now professor emeritus at Chicago Booth. In 1970 Gary Becker, AM’53, PhD’55, returned for his second stint at the University. Becker, she says, “truly blew my mind open. I had never thought of economics the way he did it.” She became his research assistant; he a lasting influence on her. “He used the finest, sharpest scalpel to cut away everything that doesn’t matter,” she says. The historian in Goldin did wonder about what got discarded: “The urge is to put back all the stuff that he claimed didn’t matter, and to say, but it does matter.” The economist in her stood in admiration: “But at the same time you have this sparkling gem you can hold and work with—a model that starts speaking back to you and gives you a greater understanding because of its brilliance and simplicity.” Around the same time, Goldin took a class with Fogel, the economic historian who would become her other major influence and who, like Becker, would go on to become a Nobel laureate. “Gary and Bob Fogel shared this incredible knack for taking the complex and making it simple,” she says. “Bob moved more in the direction of the empirics; Gary in the direction of the theory.” Drawn to history since Cornell, she worked with Fogel on her dissertation, a quantitative analysis of slavery in antebellum Southern cities. In history and economic history, slavery was the subject of intense scholarly attention at the time. Through her history-student roommate, Barbara Sosnowski, AM’71, Goldin had discovered Richard Wade’s book Slavery in the Cities (Oxford University Press, 1964), which argued that slavery and urban settings—where slaves lived apart from masters and sometimes hired out their own labor—were incompatible. Looking at data about markets and competition in those cities, Goldin concluded the opposite. Slavery was a more flexible economic system than was generally credited, she wrote, and would not soon have withered away without emancipation. After receiving her PhD, Goldin taught at the University of Wisconsin, Princeton, and the University of Pennsylvania. As she continued to study the economics of the American South, the issues around women, families, and work that have defined her career began to command her attention. She “was sniffing around for something of deeper personal interest,” Goldin wrote in an autobiographical essay, “The Economist as Detective.”  As her focus shifted to the family, Goldin felt herself getting warmer. Around 1980 she realized her work was “slighting the family member who would undergo the most profound change over the long run—the wife and mother.” Often unrepresented in historical data, married women and their labor had a hidden story that Goldin grew passionate to uncover. These investigations led to Understanding the Gender Gap—eventually. First Goldin had a chance to get her hands dirty digging up clues. In the National Archives, where the stacks were not yet off limits to visitors, she found forgotten surveys conducted through much of the 20th century by the US Department of Labor’s Women’s Bureau. They gave her data on women’s work histories before 1940, on the “marriage bars” that held wedded women out of much of the workforce in the 1920s and 1930s, and on wages. The find enabled her to write a comprehensive economic history of American women that remains a landmark.   The gender gap, a term coined by Eleanor Smeal of the National Organization of Women in 1981 to discuss different voting patterns among men and women, now more commonly refers to the different pay that men and women receive for doing similar jobs. While narrowed, the gap persists almost 35 years on, even as women have become better educated than men. Today, 78 cents is widely cited as what women earn for every dollar earned by men. Understanding the Gender Gap, published in 1990, drew on extensive data, including the neglected records in the National Archives, to reveal a complex, sometimes surprising story about gender, work, and pay over the 19th and 20th centuries. Goldin considered factors as diverse as the shift from manufacturing to clerical and sales work for women; the unpaid, often undocumented work that married women performed in the home before they began joining the paid labor force in large numbers; and the history of legislation meant to protect female workers from exploitation. The persistence of social norms and the decline of fertility rates came into her analysis too. Progress on wages over the past two centuries, Goldin showed, has not been linear. The ratio of female to male earnings rose during the Industrial Revolution and again with the growth of clerical work in the late 19th and early 20th centuries. But it remained essentially flat from the 1950s to early 1980s, even as women entered the labor force in greater numbers and became more educated. The story she constructed defied easy summary, but, Goldin argued, it showed that economic progress has been a force for gender equality. Many factors—economic, historical, and societal—have contributed to its halting pace and to “the tenacity of gender differences in the workplace.” One of those factors is wage discrimination, “a difference in earnings between two groups that cannot be accounted for by differences in the average productive attributes of the groups, such as job experience, education, and tenure with a firm.” Goldin traced the emergence of such discrimination against women to white-collar companies between 1890 and 1940, when it grew even as the number of women in the workforce increased and the wage gap narrowed.
Goldin recalls UChicago as “a cathedral of learning.” (Photography by Bryce Vickmark)
“If the considerable difference in the earnings of males and females in manufacturing was largely due to rewards to strength, then the replacement of brain for brawn work should have evened starting salaries,” Goldin wrote, and it did, before diverging with time on the job since firms barred women from most jobs with long promotional ladders—and men from jobs with short ones. In manufacturing, such segregation occurred through differences in men’s and women’s physical strength. And because manufacturing jobs paid by the piece, they afforded less opportunity for wage discrimination than salaried jobs. In clerical occupations, women were penalized by being limited to jobs with lower salaries and no chance of promotion. The impact of such policies, Goldin wrote, “was to have consciously sex-segregated occupations.” That had much to do with the stability of the gender gap from the 1950s to the early 1980s, before women’s increased political power started to have an effect.   At the end of Understanding the Gender Gap, Goldin voices optimism about the future. Today she thinks she sees how the gap can finally be closed—how the final chapter of the story can be written, as she put it in her talk to the AEA and a 2014 paper, “A Grand Gender Convergence: Its Last Chapter.” Women get paid less today, Goldin says, in part because they are more likely than men to step away from jobs or take less time-consuming jobs (switching from a law firm to become corporate counsel, for instance). When they do, corporations financially punish those who spend less time working—so concluded a study she cowrote with Katz and Marianne Bertrand of Chicago Booth looking at why earnings for male and female MBAs are similar at the beginnings of their careers but diverge over time. Some sectors of the economy, like science and technology, are ahead of others in narrowing the gap. Among pharmacists the hours-adjusted ratio of women’s earnings to men’s is 0.95, while in a few tech occupations it rises above 1. But the gap remains wide in the corporate and legal sectors, despite the fact that men and women have similar earnings at the outset of their careers in these fields. What accounts for the difference? Take pharmacists. Most are now employed by large companies that have adopted technology and streamlined processes. Thus every employee has equal access to the needed information about clients, and pharmacists can easily substitute for each other when one is away. There’s no outsized premium on working specific hours or long hours, and no penalty for working fewer—pay is linear with respect to hours worked. That evens the playing field for women, who “still do more in the home than men,” Goldin says. In business and law, by contrast, workers make poor substitutes for each other. Time pressure is intense, availability to clients and coworkers prized, and strong interpersonal relationships with clients crucial. Here the gender gap remains the greatest—and it grows with the number of years on the job. Goldin’s study with Katz and Bertrand found that after 10 to 16 years in the workforce, female University of Chicago MBAs were making 55 percent of their male counterparts’ earnings. Sixty percent of the difference, they concluded, came from career interruptions and working fewer hours. The gender gap will close, Goldin says, when employers structure their businesses to allow for flexible hours, substitutability of workers, and linear pay. Some industries and occupations will be slower than others. For a handful of jobs this won’t be possible—she cites “CEOs, trial lawyers, merger-and-acquisition bankers, surgeons, and the US secretary of state.” But she believes many more industries can embrace them than already do. “Women have demanded this type of temporal flexibility,” she says, but “more and more men are demanding it. … Not family, but work-life balance.”   Goldin and Katz share an office at the National Bureau of Economic Research (NBER), just beyond Harvard Square, where she directs the Development of the American Economy program. The space has a few cubicles for research assistants and an interior office for visiting NBER fellows that houses a bunch of stuffed animals. You enter through a childproof gate that keeps the couple’s golden retriever, Pika, from wandering. A first meeting with Goldin might include a lesson on how the retriever breeds came to be. She dotes on Pika, whom she has trained for obedience competitions. Occasionally she’ll take him out in the hallway and put him through his paces, all hand motions and gestures, no words. Katz jokes that he is Pika’s untrainer. Goldin’s curiosity is omnivorous. She’s an expert birdwatcher, an excellent gardener, and a skilled plumber; she also does her own taxes (as an economist she should be familiar with the current tax code, she says, plus “it’s really easy to do”). She doesn’t watch television, but she and Katz read to each other every night. Not long ago they reread the complete stories of Sherlock Holmes; a favorite is “A Scandal in Bohemia,” where Holmes is outwitted by a woman. Last summer, they returned to Jane Austen’s 1815 novel Emma. (Goldin doesn’t see many movies, but she’s quick to bring up that Clueless is based on the novel—”a fun movie.”) In Goldin’s 2006 seminar Women, Work, and the Family: Present and Past, students read the O. Henry short story “Springtime à la Carte” (1906), centered on a young woman who is a freelance typist, lacking the skills to become a stenographer and “enter that bright galaxy of office talent,” and The Group, Mary McCarthy’s 1964 novel about eight young Vassar graduates’ lives after college, which later inspired Sex and the City. She also assigned readings from Betty Friedan’s The Feminine Mystique (1963). Such texts sit on her syllabi alongside more traditional economics texts like Becker’s A Treatise on the Family (1981), Francine Blau and Marianne Ferber, AM’46, PhD’56, on discrimination, and her own paper with Katz documenting the power of the pill. Goldin developed a love for literature, especially W. B. Yeats, at Cornell. It has persisted, and has influenced her economics work. Novelists “are not social scientists,” Katz notes, “but they’re acute observers of the world, and the interesting job for an economic historian is to figure out which of the observations have broader validity.” The voracious reader is known among economists as a gifted storyteller herself. “One of the things she’s very good at is how to construct a compelling narrative with your model and your data,” says Elisa Olivieri, AM’11, who worked with Goldin as an undergraduate at Harvard and a research assistant at NBER. “Her papers, they’re thoughtful and rigorous, but also very readable.”   The pleasant kitchen at the NBER can be its own modest nexus of economic thought. Olivieri remembers being in the kitchen late one night, working on her senior thesis, when Goldin walked in. It turned out that the same task had kept both of them at the office late: Goldin was reviewing a draft of Olivieri’s paper. Now in her sixth year of graduate studies in economics at Chicago, Olivieri is still in close touch with Goldin. At a memorial service for Fogel last year, she heard Goldin extol his dedication to his two families, at home and at school. “She might well have been talking about herself,” Olivieri says. “She has a lot of intellectual sons and daughters, but a lot of daughters in particular. She’s a pioneering example and follows through with being a truly mentoring person.” She keeps a photo of Goldin in her office and is on notice to send her dissertation draft to Goldin as soon as it’s finished. In December 2013, two months after Fogel’s memorial, the NBER held a conference in Goldin’s honor called Human Capital in History: The American Record (the papers were published this November by the University of Chicago Press). “This was the first NBER conference I’d ever been at where there were lots of babies in the room,” says Boston University economist Robert Margo, who organized the event with two of Goldin’s former students, Leah Platt Boustan and Carola Frydman. Boustan remembers Goldin saying, “as long as the baby is not asking questions that are better than mine, they are totally welcome.’” Boustan now has an infant of her own whom she recently took to an economics seminar. “I had to psych myself up for that,” she says. “If I hadn’t had someone like Claudia to tell me through example that it was OK, I would’ve felt like, ‘who am I to bring a baby here?’” Boustan’s reluctance may be exacerbated by the shortage of women in economics. A recent project of Goldin’s examined why the number of female economics majors has declined even as women now constitute the majority of college students. The difference in men’s and women’s math ability on entering college is negligible, if not in women’s favor, but nationwide there are three male econ majors for every female. Goldin says the data show that women are less likely to major in a subject when they don’t earn top grades in it. Economics tends to lose prospective women majors who get lower than As in a gateway course like Introduction to Economics, while men who get Bs and even Cs are less likely to be deterred. Writing in Bloomberg View in October 2013, Goldin asked whether Janet Yellen’s appointment as Federal Reserve chair would draw more women into the field. It might, she said, but they will need more encouragement than a role model even of Yellen’s caliber. Another approach, she proposed, is to convince them of the subject’s usefulness beyond careers in finance and business—and of its appeal beyond mere usefulness. “Many young women,” she wrote, “don’t seem to understand that economics is also for those who have broad intellectual interests.” Shedding empirical light on a wide range of social mysteries drives Goldin. She’s still chasing clues and piecing together stories. She’s now at work, with Katz and former graduate student Marcella Alsan, an assistant professor of medicine at Stanford, on infant mortality and the role of sewer systems in boosting the likelihood that infants would survive. One of the first sharp changes in those rates in the United States, she says, was in Massachusetts in the 1890s, reducing infant deaths from about one in seven to one in 10 to 20. Against other theories that the drop had to do with changes in the milk supply, she and her collaborators suspect the creation of a watershed and metropolitan water district. “Babies get bathed and touch water even if they’re breast-fed,” she says. “The pathogenic environment is passed on.” At first the three “went down the cow path” too, but now they’re looking for evidence in how towns’ mortality rates varied with their distances from the watershed and whether or not they belonged to the water district. Lower mortality rates in turn changed the workforce, improved health and longevity, and had a cascade of other effects on society. Between what she finds in the archives and the illumination afforded by the quantitative tools of economic analysis, Goldin thinks, she’ll soon have the answer.