Since last winter, 1.8 million women have left the labor force entirely—neither working nor looking for work. At first, closed schools and the high cost of child-care options seemed responsible. But economists who have crunched the numbers argue that closed schools can’t explain higher female unemployment. Women with young children make up only 12 percent of the labor force and were only slightly more likely to leave the labor force than were women without young children. The exception? Women with young children who don’t hold college degrees—they constitute only 6 percent of the labor force but saw the biggest drop in employment. Their employment rate has fallen by almost eight percentage points since the pandemic started.
This suggests that women aren’t working for various reasons. For most families, several factors—child-care options, how much a given job will pay, and their partner’s employment prospects—determine whether they will decide to return to work. Rarely in economics does a single cause explain a phenomenon; policies often affect behavior on the margins. If you’re struggling to find good, affordable child care and you are being paid more to stay at home, that extra factor can tip the scales.
Indeed, several current policies seem to be discouraging women from returning to work.
Congressional lawmakers from both parties are considering incentives such as providing federal funding to pay for hiring bonuses for workers and expanded tax credits for employers. A handful of states are moving to implement such programs on their own, without waiting for Washington.
Some economists, Republican lawmakers and business owners say enhanced federal unemployment benefits are contributing to the labor shortage, because many workers receive more in government aid than they would get on the job. Those benefits — $300 a week on top of regular state payments — are due to expire after Labor Day.
Other economists say the payments have provided a boost to many lower-income families, who have disproportionately lost jobs in the coronavirus pandemic, while in turn pushing money back into the broader economy.
The U.S. population grew 7% between 2010 and 2020, according to census results. The age breakdown isn’t yet available, but a smaller sample by the Census Bureau and the Bureau of Labor Statistics shows that the working-age population — those 16 to 64 — grew just 3.3%. Because the share of those people working or looking for work has shrunk, the working-age labor force grew only 2%, and actually shrank last year. Some of those missing workers will return when the virus recedes. But many won’t: Baby boomer retirements have soared.
Reversing this move would require either a dramatic increase in births, which has eluded countries with more-family-friendly policies, or immigration, which is politically hard.
The demographic squeeze is far more severe in China, which admits almost no immigrants and for years limited families to one child. Tuesday, authorities said the population in China had grown just 5.4% in the past decade. The working-age population — those 15 to 59 — shrank 5%, or roughly 45 million people. When worker shortages began emerging over a decade ago, factories began moving to poorer inland provinces and then cheaper countries including Vietnam. In recent years some indicators suggest jobs are getting harder to fill, though the data might not be nationally representative.
“Labor force participation—defined as all civilians working full or part time, as well as those who are unemployed but looking for work—fell dramatically for both genders between March and April 2020,” noted Gallup. In April 2020, men’s labor force participation was at 97.8 percent of its February 2020 level and women’s labor force participation was 96.9 percent of its February 2020 level—a gender gap of just 0.9* percentage points.
By February 2021, labor force participation for both sexes had ticked back up somewhat. And while women were still seeing a less full recovery, the gap was again less than one percentage point. Compared to February 2020, men’s February 2021 labor force participation was 2.2 percent smaller and women’s was 3.1 percent smaller.
That’s not nothing—“the gap in labor force changes amounts to roughly 493,000 more women than men being absent from the labor force since the pandemic began,” Gallup pointed out in early March. But it’s also not evidence that women have been uniquely devastated by pandemic-related job losses, especially when—contra previous economic downturns—many of the circumstances that initially created the job losses will remedy quickly as life returns to a more normal pace.
Black and Hispanic women disproportionately work in industries — such as leisure and hospitality — that were most negatively affected by the pandemic, said Valerie Wilson, director of the Economic Policy Institute’s Program on Race, Ethnicity and the Economy.
Since February of last year, participation rates for white women, including mothers, haven’t dropped more than 3.2 percentage points. Rates for women of color — especially Black and Hispanic mothers with children under 5 — have at times fallen more.
Large numbers of Black and Hispanic women work in essential sectors — most notably healthcare — that have seen increased demand in the past year. But in those industries, according to Dr. Wilson, they tend to hold jobs that offer comparatively low pay and flexibility.
The average number of hours men and women work per week has varied more widely since the start of the pandemic than in recent years. People have worked fewer hours overall, with men’s time dropping more significantly. That has narrowed — but not closed — the gap between hours worked by men and women.
About 2.3 million women have exited the U.S. labor force since the pandemic began, compared with about 1.8 million men, according to government data. Many were driven out by layoffs in food service, health care, and hospitality — sectors that employ a majority of women and that have been most affected by the economic slowdown. Others left their jobs voluntarily, forced to stay home and care for children suddenly unable to attend school or daycare.
As a result, female participation in the workforce has dropped to 57%, a level not seen since 1988. The situation is dire enough that U.S. President Joe Biden called it “a national emergency.” With schools reopening and vaccines becoming more widely available, there is light at the end of the pandemic tunnel, but questions remain about whether working women will recover from such a deep setback.
The labor force participation rate—the proportion of the population working or seeking work—for Americans age 55 and older has fallen from 40.3% in February of 2020 to 38.3% this February—representing a loss of 1.45 million people from the labor force.
The participation rate initially fell much more for prime-age workers, those between ages 25 and 54, from 82.9% in February last year to 79.8% in April, but has since jumped 1.3 points, to 81.1% in February of this year. By contrast, participation for older workers has shown no rebound from last spring.
Lydia Boussour, lead U.S. economist at Oxford Economics, said the unique health risk to older people during the pandemic has likely deterred them from rejoining the workforce in greater numbers. Public-health officials have warned that the risk of severe illness from Covid-19 increases with age. Among those who contract the virus, the death rate for those age 50-64 is nearly nine times that of those age 30-39, according to the Centers for Disease Control and Prevention.