The Great Recession Is Pushing Women Out of the
Workforce
By Bryce Covert
The Nation
May 7, 2012
http://www.thenation.com/blog/167743/great-recession-pushing-women-out-workforce

Friday's jobs report seemedto grab 
headlines for one aspect in particular: the
labor force participation rate, i.e., the number of
people either working or looking for a job, fell to
63.8 percent, the lowest level since 1981. That means
more and more people are dropping out--retiring, turning
to something else like grad school or just giving up on
the prospect of a job altogether. But there was a
debate about how much of a bad sign this is. Is it
because the recession has made people lose hope of
finding gainful employment? Or is it just because baby
boomers are hitting prime retirement age and moving to
Miami?

It's likely a combination of factors. But there seems
to be a big difference in what's driving men and women
to leave the labor force.

What do the numbers look like for both genders?
According to the Bureau of Labor Statistics's Current
Population Survey, men's participation rate--the ratio
of men working or looking for work versus those who
have dropped out--has fallen 3.1 percentage points since
the beginning of the recession, and women's has fallen
1.8 points. The dip looks more troubling for men than
for women. The last time women's labor force
participation rate was this low "was in June 1995,"
Joan Entmacher of the National Women's Law Center told
me. But her colleague Katherine Gallagher Robbins noted
that this year has been pretty steady for women's rate,
while men are starting to experience a real decline.

Yet interestingly, a recent paper from the Federal
Reserve Bank of Kansas City (hat tip to Mike Konczal)
finds that the forces behind those numbers are very
different. For men, 60 percent of the drop from 2007 to
2011 has been due to a decline in "trend
participation," meaning things that were on course to
happen whether we were in an economic crisis or not.
That's because the rate for men "has been falling
steadily for 60 years," in part due to things like
increased access to Social Security benefits and an
aging population that make retirement look like a
pretty good option. In contrast, the paper "attributes
essentially all of [women's] decline to the cyclical
downturn of the labor market"--in other words, the fact
that we hit the Great Recession.

Why would a recession drive women out of the labor
force so much more strongly than men? Because when the
labor market looks shoddy, the Kansas City Fed paper
says, "nonmarket work can become relatively more
productive for many women." That's a fancy way of
saying that domestic work--and very likely childcare in
particular--becomes more valuable. "The difference
between the benefits of working or not working may
often be fairly small" for women, it says, while "the
human capital of men is often more specialized toward
market activities," in other words, jobs outside the
home.

When parents are trying to cut back on costs, it's
unsurprising that childcare could top the list.
According tothe National Association of Child Care
Resource & Referral Agencies, the average annual cost
of putting a 4-year-old in full-time care can be as
much as $14,050 a year. No wonder that nearly 40
percent of parentsworry that their income won't be
enough to cover it. And most parents evaluate that cost
against a woman's salary. Many mothers are deciding
that it's more cost effective to stay home and focus on
domestic work than to go out and try to get a job in a
terrible economy.

This is even truer for low-income women. Stay-at-home
mothers are more likely these days to be young Hispanic
women with low levels of education who may be unable to
get jobs that will pay enough to outweigh the cost of
childcare. The economy has made that decision even
harder in another way: state budgets that were all but
decimated by the recession led thirty-seven states to
pull back on childcare support.

Women who leave the labor force for care duties may be
hard to categorize, however. "For women it's a little
tricky because those who are out for family-related
reasons may not call themselves discouraged workers,"
Entmacher said. While more men are counted in the
category of workers who have given up entirely on
looking for a job--a troubling group --women who can't
find jobs that work with their care-giving
responsibilities may be just as discouraged but not
counted as such.

On the brighter side, it's also possible that women's
higher inclination to get a college degree is playing a
role. As Catherine Rampell reported at the end of last
year, the high number of young women dropping out may
not be doing so indefinitely, but instead are leaving
to get more education. While demographic trends may be
leading older people to drop out of the labor force and
into retirement, there are a lot of young people
leaving as well. Evan Soltas calculates that of the
millions of "missing" people who should be in the
workforce if we hadn't entered a recession, the young
are seven times more over-represented. That could mean
that rather than giving up altogether, young women are
going back to school in the hopes of upgrading their
prospects once the job market really rebounds.

I hope more women are dropping out for the latter
reason instead of the former, because taking a break
from the labor force to care for children can have a
huge impact on women's earning capacity. As a report
from Rutgers notes, women who take maternity leave
often "pay a penalty for leave-taking in wages and
earnings long after [their] child's birth," a portion
of which is likely due to salary increases that would
have happened had she stayed in her job. Similar
penalties will apply to women who are being squeezed
out of the labor force and into the home by the
recession.

____________________________________________

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