Why the U.S. Economic Downturn Could Hurt Women More

In most recessions, the hardest-hit sectors are ones like manufacturing and construction — bands of the employment spectrum traditionally occupied more by men than women. In the Great Recession, large numbers of jobs vanished in those areas plus financial services and durable goods, helping to earn it classification as a “mancession.”

The current recession is already panning out differently, though, according to researchers at Northwestern University, the University of Mannheim and University of California San Diego. The staggering employment cliff precipitated by the COVID-19 pandemic has been tougher on women, and in a variety of ways.

“Compared to ‘regular’ recessions, which affect men’s employment more severely than women’s employment, the employment drop related to social distancing measures has a large impact on sectors with high female employment shares,” write the authors of “The Impact of COVID-19 on Gender Equality,” a working paper that will continue to evolve as the pandemic takes its course. “In addition, closures of schools and daycare centers have massively increased childcare needs, which has a particularly large impact on working mothers. The effects of the crisis on working mothers are likely to be persistent….”

The COVID-19 economic downturn has substantial implications for gender equality — both in the workplace as well as within households. Working from home may become an enduring outcome of the crisis, at least in certain jobs and sectors. Some employers are already adjusting policies to the coronavirus era: Microsoft has responded by granting workers up to three additional months of paid leave to cover newly increased parental duties stemming from school closures. At the same time, many households — especially those with two incomes — are having to redefine how childcare and housework will be distributed.

Given the potential long-term impacts on women and gender equality, “understanding how this crisis is different from the other ones is important,” said Matthias Doepke, economics professor at Northwestern University and one of the study’s authors. “This downturn is most likely bigger than anything we’ve seen since the Great Depression, and it’s very clear this needs a very strong policy response.”

Unmasking Inequality

That women are disproportionately finding themselves out of work is hardly surprising given where job growth has been since recovery from the Great Recession, says Diane Lim, director of outreach and senior advisor for the Penn Wharton Budget Model, a nonpartisan research initiative that analyzes the fiscal impact of public policy programs.

“The … very sectors that were looking at growth in the labor market for years now are the ones on the front lines of the pandemic and economic fallout from the crisis,” says Lim. “These occupations are disproportionately held by women. That is what was driving the fact that female labor force participation was rising as male participation was stagnating, because the occupations [men] were in were more skewed to the making-things part of the economy, and women were more likely to be in the human-interaction occupations. Americans [had been] consuming leisure and hospitality in spades, and that is how the recovery happened. That is where all the new businesses were coming up…. [The] coronavirus crisis has stopped the fastest growing part of our economy. It was slow and steady growth — no surprises in month after month of economic data.”

“[The] coronavirus crisis has stopped the fastest growing part of our economy.” –Diane Lim

More than 16 million workers filed unemployment claims in just the first three weeks of this recession – a drop-off in jobs that is unprecedented in modern times. (Last week, the number topped 22 million.) But 60% of those losses were experienced by women, according to an analysis by the Institute for Women’s Policy Research of employment data released April 3. More women than men lost jobs across most sectors – in leisure and hospitality, education, health services, retail, professional and business services, and others.

There are important underlying reasons women are being negatively affected by the coronavirus-induced downturn, says Janice Bellace, Wharton professor of legal studies and business ethics. “Many women work part-time to have flexible scheduling, and many women who work part-time are single mothers. They are the first to be laid off, and for them any loss of income is a very big hit. Most of these women are in occupations that for the most part are not unionized, and they are not in the type of job where seniority means a great deal. These are the type of jobs where there isn’t much security of employment. Will those jobs be waiting for them when they come back? Will they lose their health insurance? People talk about good jobs, but lots of women don’t work in that type of job. I think it’s the structure of employment in the U.S. that predicts the result that we see happening now.”​

Despite shifts in societal norms, women still dominate certain fields and men others. In childcare, 95% of workers are women, according to the labor department. Women make up the majority of workers in jobs that require close physical contact: 92% of dental and medical assistants, 89% of home health aides, 89% of hair stylists, and 80% of manicurists. And even now, women earn only 81 cents to every dollar a man earns, according to the U.S. Department of Labor.

Still, many women remain on the front lines of the crisis. A third of jobs held by women meet federal guidelines as essential, according to a New York Times analysis of census data. Nine out of 10 nurses and nursing assistants are women, and more than two-thirds of workers at the grocery store aisle and fast food counter are women.

“Men do make up a majority of workers in a number of essential sectors, including law enforcement, transit and public utilities, and millions face serious and unquestionable risk as they head to work every day,” the Times reports. “But there are simply not as many of these jobs as there are in the industry at the forefront: healthcare.” But while these women are keeping their jobs, they also are getting sick. Nearly three-quarters of those being infected in healthcare jobs are women, according to statistics from the Centers for Disease Control and Prevention cited by the Times.

On the Home Front

Within the category of working mothers, the nature and severity of the crisis differs, with 15 million single U.S. mothers with children especially vulnerable.

“If all schools in the U.S. are closed for a prolonged period, so that single mothers cannot work, then 21% of all children are at risk of living in poverty,” the study coauthored by Doepke states. “In normal times, many alternative forms of childcare arrangements are used. However, many daycare centers have been ordered closed. Informal care performed by grandparents, other relatives, friends, or neighbors is being discouraged or prevented by shelter-in-place orders to slow down the spread of the virus. There is little room for alternative arrangements in the COVID-19 crisis.”

“What happens when women in healthcare have to be at work and all these people are at home by themselves?” Stephanie Creary

Particularly hard hit are African Americans in general, who, according to the data that is emerging, are dying of coronavirus at disproportionately high rates in several states.

“If I add together who has to go to work in healthcare and expose themselves to the virus with who has to take care of the house, I think about women of color,” says Wharton assistant management professor Stephanie Creary. “Women of color tend to be more head of house or single caregivers, not just to children but also to elders and other family and non-family members. So, what happens when women in healthcare have to be at work and all these people are at home by themselves?”

Obviously, families comprising a husband with a fulltime job and a mother who stays at home will have fewer adjustments to make to school closures, but this group accounts for only 25% of married couples with children, the study notes. Dual full-time earners account for 44% of couples with children.

Traditionally, it is the lower paid worker who takes on more of the unpaid responsibilities at home, says Wharton professor of business economics and public policy Olivia S. Mitchell. When women do work outside the home, “they tend to hold jobs that do not offer paid vacation or paid sick leave, and their jobs pay less in the first place. Therefore, women are more likely to have to need to work, and thus will be more exposed to the virus. Clearly, more of the COVID-19 burden will fall on women than men, on average.”

Moreover, if women leave their jobs to have children, they take a rather substantial pay cut pay when they return. Research has shown that highly skilled women face an 8% pay cut, and lower skilled women about 6%, when they have a child. Mitchell notes that “in view of the troubled economy we’re facing, the impact on wages could be even more negative. Many women will be unpleasantly surprised when they try to find a job after being out for a while.”

Lessons and Silver Linings

In recent times, parenting for everyone “has become more intense,” says Doepke. “Both mothers and fathers spend more time and have a lot more engagement with children. What you see in data if you look back to the 1970s is that men did almost nothing. Now it’s a lot more balanced than it used to be, though it’s still the case that the majority of childcare is done by women. Over decades the shift is enormous and at the same time the snapshot of today is still informed by traditional gender roles.”

“Clearly, more of the COVID-19 burden will fall on women than men, on average.” –Olivia S. Mitchell

Concentrated time at home is calling attention to that disparity — and leading to a new level of compromise. “Dual-income couples have to negotiate their space, they obviously have to divide their duties and their time — they both have deadlines and it’s very real,” says Creary. “It would be great to see some studies come out of this. If we could get some good strategies, those would become options people can use going forward.”

As a byproduct, the coronavirus crisis may also change how working from home is viewed by companies. “This crisis has started to make the case for why flexibility might be necessary,” Creary notes. Flexible work arrangements have long been enshrined as a stated benefit in many workplaces, but actually using them can result in stigma, lower job evaluations and wages and loss of promotions, several studies have found. “That needs to change,” says Creary. “Why offer flexible work if people are going to be penalized for it?”

The pandemic will also help focus attention on the wage gap and what it means for the women who hold certain jobs, says Lim. “I think this episode will raise the wages of healthcare workers, since they are in such high demand,” she says. “Not just in those jobs but also in interpersonal jobs where there is so much demand — it’s got to raise pay in those professions.”

Most immediately, Doepke and his coauthors — Titan Alon, Jane Olmstead-Rumsey and Michèle Tertilt — offer a series of recommendations to blunt the impact of the crisis on women. They advocate that government subsidies replace 80% of employee pay when workers need to miss work to provide childcare due to school and daycare closures; that work requirements for government assistance programs such as Temporary Assistance for Needy Families and Medicaid be suspended until school and daycare centers re-open, and that unemployment insurance remove the requirement to be actively seeking work over the same period; and that unemployment benefits be extended to workers voluntarily separating from employment to provide childcare. They are also recommending that universities extend tenure clocks for faculty members with children under age 14, with similar provisions for other employers with up-or-out promotion systems; and that companies be encouraged to waive billable hour targets tied to bonus pay for 2020 for women with children under age 14.

The bottom line, says Doepke, is that recovery in the past has been easier because women were less affected. Dual-earner households could fall back on women’s income in a downturn. Not so in this downturn.

“There have been very different outcomes for men and women that have made the recovery easier in past recessions,” says Doepke. “It will be different this time. There is going to be a difference in this recovery that has to be responded to.”

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