Women’s labor force patterns revealed anew

“While economists are not sure exactly what has caused the downshift, one frequently cited factor that could be preventing more mothers from working is the continued lack of available and affordable child care options.” https://t.co/JnAp5m4JvA

— Grace Rauh (@gracerauh) July 26, 2024

Women’s labor force participation has hit record highs in recent years, but a closer look reveals a long-standing pattern that often goes unnoticed. According to recent economic data, the labor force participation rate for women aged 24-54 reached a record high of 78.1% in May, surpassing pre-COVID levels. However, this promising statistic was short-lived, as the rate fell to 77.9% the following month, despite an uptick in men’s participation. Researchers attribute this drop primarily to increased caregiving demands at home during the summer months.

"We know for a fact that moms in particular get pushed out of the labor force regularly when there isn’t access to affordable child care and when we don’t have paid family medical leave." https://t.co/6DDKi8s1Fq

— Dave Hendricks (@dmhj) July 26, 2024

The closure of schools and the lack of affordable childcare options pull parents, predominantly mothers, out of the workforce to take on caregiving roles. This phenomenon becomes clear when examining non-seasonally adjusted data.

“But the $24 billion in aid that the government allocated to the child care industry expired in September. Some employers are tightening expectations about working on site, making it more difficult to balance job demands with needs at home.” https://t.co/W7pCv1oui3

— Howard Liu, MD MBA (@DrHowardLiu) July 26, 2024

“This pattern was hiding in plain sight,” said Melanie Wasserman, an assistant professor at the UCLA Anderson School of Management and co-author of a National Bureau of Economic Research (NBER) paper. “It becomes visually obvious from the non-seasonally adjusted data.”

How has labor market participation affected women? ADP chief economist @NelaRichardson shares her insights with @nytimes. https://t.co/ue3meV9LIr #labormarket #economy #women

— ADP Research (@AdpResearch) July 26, 2024

Data gathered since 1994 shows that “taking care of house or family” is the primary reason for the decline in labor force participation among prime-working-age women, particularly mothers of school-age children, during the summer. The caregiving burden falls heavier on mothers with young children, while women without children experience the least fluctuation. The seasonal drop in women’s employment and hours worked during the summer translates into an estimated 3.3% decrease in weekly earnings, a figure five times greater than that for men. Women are more likely to leave their jobs during the summer across all sectors, with a significant portion of this decline attributed to women’s tendency to seek employment in education, driven by the sector’s flexible summer schedules. The rise of remote work during the pandemic has introduced more flexible job options for parents, but its long-term impact on gender equity remains uncertain. Women working remotely face more interruptions related to childcare and schooling, which can impact their long-term career progression. Addressing these seasonal trends and gender disparities requires more detailed and granular data on parents in the labor force and caregiving pressures. Understanding and addressing the unseen patterns of women’s labor participation is crucial for promoting true gender equity within the workforce. Despite historic gains in overall workplace participation for women, the need for affordable child care remains a significant barrier. Jessica Cuevas, a 35-year-old resident of Chicago, exemplifies the struggle faced by many working mothers.

Caregiving impact on workforce participation

Cuevas, who previously worked as a college counselor, switched to a remote corporate job after the birth of her first son due to its flexibility and reduced commuting time. Following the birth of her second son, she quit her job, primarily due to the challenges of finding affordable and reliable child care. “I feel like right now, considering the economy, considering just the cost of living, we feel stuck,” she said. As companies and policymakers look for ways to support working parents, the issue of accessible and affordable child care remains crucial for sustaining the progress in women’s labor force participation. The growth in women’s contributions to the labor force in recent decades is transforming economies around the world. Economic analysis highlights the economic possibilities opened up by greater women’s participation in the labor force since 1999. Twenty-five years later, new research finds that women’s labor-force participation has grown across many developed economies, offering improvements in welfare and opportunity for women and having an enormous economic impact. Despite this progress, challenges remain. Women’s propensity to work is lower than men’s, particularly in emerging markets, and they are more likely to take part-time jobs, which tend to be lower paid. Non-paid work such as family caregiving is a major barrier to women’s participation in the workforce and to achieving equality more generally. As birth rates fall dramatically almost everywhere and as aging populations become a growing concern for governments and investors, women’s labor-force participation is more critical to the global economy than ever. Without a major productivity boost, higher participation by women, older workers, or both will be needed to prevent economic contraction. Women have made significant progress with respect to labor force participation, pay gaps, and leadership roles. However, the scarcity of women in the most senior ranks of firms, especially at the executive level, is notable and persistent. The ratio of women diminishes higher up in the power structure of companies. While much remains to be done, there are reasons to expect women’s participation in the workforce, as well as pay and opportunities at the highest ranks, to continue to increase. Overall, the increasing participation of women in the workforce is reshaping the global economy, creating new opportunities, and presenting ongoing challenges that need to be addressed.