Congratulations to Claudia Goldin, the
2023 recipient of the Nobel Prize in Economics. Goldin was cited “for
having advanced our understanding of women’s labour market outcomes.” The
press
release from the Royal Swedish Academy of Sciences highlighted that she “provided
the first comprehensive account of women’s earnings and labour market
participation through the centuries. Her research reveals the causes of change,
as well as the main sources of the remaining gender gap.”
Goldin’s
work has shown how women’s historical contributions to the labor force
frequently went unmeasured, illustrating how what is not counted often ends up
not counting in policy discussion.
As a Lecturer at Auckland University in New Zealand in the late
1970s, I encountered an example of how official statistics could conceal
women’s labor market experiences. At that time, unemployment was calculated as
the number of workers who had officially registered for unemployment benefits.
However, unemployment benefits were effectively limited to heads of households.
Secondary workers were not eligible for unemployment benefits and therefore had
no incentive to register if they lost their jobs. And any unemployed worker who
failed to register disappeared from the measured labor force. This approach
meant the true extent of unemployment was understated, and the understatement
was likely to be largest among women as they were less likely to register
because they were more likely to be classified as secondary workers and not
qualify for unemployment benefits.
I attempted to overcome these measurement issues to obtain a more
inclusive estimate of New Zealand’s unemployment rate. The results were
published in 1978 in the New Zealand Economic Papers (“Unemployment in
New Zealand: An Errors in Variables Approach to Measuring the Number of
Unemployed,” NZEP, 12:1, 13-48). Based on data from 1965-1976, my estimates
suggested New Zealand’s official unemployment figures captured about half of total
male unemployment but only a tenth that of females. I also found the female unemployment rate over the estimation
period was roughly three times the rate for males.
With the election of David Lange’s government
in 1984, New Zealand entered a period of economic reform, not least of which
was the Reserve Bank Act of 1989 that established formal inflation targeting.
And in 1985, New Zealand introduced a household survey to measure labor
participation and unemployment so that their statistics could be brought in
line with international best practice, making it no longer necessary to rely on
the admittingly crude approach I had to use in the late 1970s.
From 1988 to 2001, the female unemployment
rate was less than the rate for males. Since then, the reverse has been true,
though in general, the unemployment rates for both groups have been similar.
Importantly, these data are now subject to less systematic measurement bias and
therefore provide more accurate, and useful, information on the experience of
women in the New Zealand economy.
