Pandemic-Led 'Shecession' Hits Women Harder Than Men
The hit to their earnings potential could take decades to recover.
Recent unemployment has had a disproportionate impact on women, according to a study published by the Centre for Economic Policy Research’s VoxEU, which promotes research-based economic policy analysis. Using data from the U.S. Bureau of Labor Statistics, the authors found that the “she-cession” caused by the COVID-19 pandemic increased women’s unemployment by 2.9 percentage points over men.
In “The shecession (she-recession) of 2020: Causes and consequences,” authors from Northwestern University, the University of California, San Diego, and the University of Mannheim found this is a departure from unemployment trends of previous recessions, which either affected men and women equally, or had a disproportionate effect on men.
Men have also recovered faster from recent unemployment, the authors found. As of August, women’s employment was still 20% below the pre-recession level, compared to 9% for men.
“There are two primary causes of the disproportionate impact of the current recession on women’s employment. First, women’s employment is concentrated in sectors that are relatively stable in typical business cycles, but were strongly affected by the shutdown and social distancing measures during the pandemic,” the authors wrote. “Second, as schools and daycare centres were shut down, parents’ childcare needs multiplied. Women have provided the majority of additional childcare during the crisis, leaving many of them unable to work.”
It may take decades for the women who lost earnings potential during the current recession to make up those losses, the study found. Modeling shows that the relative losses in women’s human capital compared to men are more than a percentage point higher than in a typical recession.
If these income shocks lead to reduced consumption within households, we could see a sustained recession as “additional sectors of the economy see a fall in demand for their products, so that the initial shock is amplified and propagated throughout the economy.”
The authors argue that opening schools and daycare centers, provided that it’s safe to do so, can hasten economic recovery.
“This change would benefit women disproportionately, to the extent that much of the negative impact on women’s relative labour-market experience and relative wages could still be avoided,” they wrote. The authors added that more working mothers have older children, and concluded that opening schools would be more beneficial than opening daycare centers.