Women and the Economic Recovery

News media coverage of the 2008 recession and the subsequent recovery has focused on changes in total employment and movements in the overall unemployment.  Although the change in the total number of jobs is an important economic indicator, a focus on overall employment and unemployment can mask important changes in the composition of the workforce.  I look beyond changes in total employment to illustrate why the 2008 recession is unlike any in U.S. history.  Job losses in recessions previously were concentrated in traditionally male-dominated jobs.  The 2008 recession was different.  Women lost jobs in record numbers and women have seen small job gains during the recovery.  This stands in stark contrast to previous recessions and recoveries.

The following graph illustrates changes in the full-time equivalent employment (a part-time job is counted as ½ of a full-time job) of men.  Four years after total employment started to decline, men’s employment recovered and grew to 4 to 5% above the pre-recession peak in the 1970’s and 1980’s, but only about 1% above the pre-recession peak after the 1990 and 2000 recoveries.  The recovery over the past two years has been especially weak.

The U.S. labor force changed dramatically during the 1970s and 1980s.  The labor force participation rate of women increased from 43.3% to 57.5% between 1970 and 1990 but has leveled off since then.  The widespread reallocation of women’s human capital from household activities (not included in GDP) to paid market work had a profound impact on measured employment and GDP.  Employment and GDP increase, even though the same work is being done, when house cleaning and lawn care tasks are completed by paid service workers rather than by family members.

Cyclical employment fluctuations look very different for women.  The robust labor market recoveries of the 1970’s and 1980’s were fueled by the entry of women into the labor force.  Women’s employment grew by 15% between 1974 and 1978, and by 10% between 1981 and 1985, despite the deep recessions.

Job losses during recessions were largely confined to men until the 2008 downturn.  Women’s employment never fell by more than 1% in any recession prior to 2008.  In contrast, women’s employment fell by 5% between January 2008 and December 2009, and is still 4.6% below the pre-recession peak.

Future economic recoveries are unlikely to exhibit the robust employment gains that occurred during the 1970’s and 1980’s as millions of women moved from unpaid household work to jobs in the market sector.  This type of transformational change is unlikely to occur again.

The 2008 recession is unique because of the magnitude of employment losses sustained by women (although still smaller than for men) and the sluggish growth in women’s employment during the recovery.   In the past year both employment and labor force participation declined for women but increased for men.  Despite the labor market gains achieved by women over the past forty years, women face a somewhat new challenge – coping with substantial job losses in an economic downturn.

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