Women are Closing the Labor Gap, But Much Work Remains

Women are Closing the Labor Gap, But Much Work Remains

“Balance for better” is the theme of this year’s International Women’s Day, which takes place today. From an economic perspective, women in the U.S. have made tremendous strides. But the balance still has a ways to go.

As just one example of that ongoing imbalance, consider the rate at which women participate in the labor force. Just out today, the new employment report from the Bureau of Labor Statistics shows that the participation of working-age women stands at 76 percent versus 89 percent for men.

But at the same time, there is good news: The gap — now at 13 percent — has never been smaller. Think back to the days following the Second World War, as women started entering the peacetime workforce in substantial numbers: In 1948, for example, just 35 percent of working-age women participated in the workforce.

Most of the progress in closing the participation gap between men and women occurred before 1990. That rise in female participation was one of the era’s main drivers of U.S. economic growth. But after peaking in 2000, female labor participation started a 15-year period of stagnation and backsliding.

On the upside, in recent years their participation has started ticking upward again. This comes as somewhat of a surprise. Why? 

Because the recent increase in women's participation is taking place at a time when the working-age population is barely growing. Baby Boomers are leaving the workforce in droves and retiring. Their exodus is a main reason why the U.S. is experiencing labor shortages. The addition of millions of women in the workforce has helped them and their families financially. And from a business perspective, their addition has made a solid dent in alleviating job shortages – a big challenge these days, amid a tight labor market.

As of late, their contribution has been particularly substantial in jobs traditionally assumed by men. As just one example, the transportation industry faces severe shortages. But in recent years, the ratio of women to men in transportation jobs has risen dramatically, from 18 percent in 2015 to now 21 percent, as evidenced by today’s jobs report.

A wealthy country like the U.S. affords some women the luxury of staying home by choice. Though because foregoing work outside the home to care for family is not financially feasible for most, more concerted efforts by business and government would go a long way in striking a better balance for them.

First, working mothers need more help with childcare, which can prove an expensive impediment to employment outside the home. Even in an age when in most families both parents have jobs, women still spend more time than men dealing with care for their children (14 hours per week, according to Pew, as compared with eight for men). And it's expensive; in many states, the cost of childcare is akin to the cost of a college education.

Working mothers also need a greater level of job security and flexibility. That way, they can better handle the curveballs parenthood regularly throws — children getting sick, for example. Working mothers are disproportionately responsible for managing their kids' health, and must often forgo their pay if they miss time at work.

Third, there needs to be a greater effort to help women re-enter the workforce if they have taken time off to raise their children. One study in the American Sociological Review found that women who have stayed home with children are half as likely to land job interviews compared to women who are at home because they were laid off.

Make no mistake: We economists — who also are parents — recognize greater participation in the labor force isn’t the end all be all. The pay gap and hiring biases, for example, are big issues worthy of a separate conversation. But tackling this trifecta — childcare, flexibility, and re-entry — would help women ramp up their recent gains in participation. In doing so, such measures would indeed help provide a better balance not just between work and life, but between men and women on the job overall.

Gad Levanon is The Conference Board’s Chief U.S. Economist. Elizabeth Crofoot is a Senior Economist at The Conference Board. Joe Minarik is the Director of Research at The Conference Board’s public policy affiliate, the Committee for Economic Development of The Conference Board.

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