An Employment Priority: Women Reentering the Workforce Are Pivotal to U.S. Economic Recovery
The February 2021 U.S. employment report marked one year since the last report before the severe labor market shock of the COVID-19 pandemic. Though 58% of the jobs lost in March and April 2020 have been recovered as of February 2021, according the U.S. Bureau of Labor Statistics (BLS), the speed of the recovery has varied greatly across individuals, households, and sectors, leading many economists to describe the recovery as “K-shaped.”
This phenomenon is particularly applicable to women, who have been disproportionately affected by the 2020 recession. And while this is concerning for policymakers focused on gender equity and inequality, it also has important implications for the broader U.S. economic recovery and outlook for monetary policy. Women reentering the labor force throughout 2017–2019 were a key driver of labor supply and real GDP growth prior to the COVID-19 crisis. The extent to which women come back into the labor force in 2021 and beyond is critical to the overall economic outlook.
Women have been more affected by the post-pandemic economy
Women disproportionately lost their jobs and dropped out of the labor force during last year’s recession. Between February and April 2020, the nadir of the recession, approximately 13.4 million U.S. women (representing 18% of pre-pandemic jobs held by women) lost or quit their jobs. This compares with 14% of pre-pandemic jobs lost that were held by men. Similarly, during the pandemic women dropped out of the U.S. labor force at higher rates than men, with the female labor force participation rate dropping 3.5 percentage points versus 3.1 percentage points for men. More than 2.5 million women are no longer in the U.S. labor force, largely due to COVID-19 (all data is from the BLS).
Private surveys tell a similar story. A Harris poll last summer found that only 47% of women said they were still in the same job they held before the pandemic versus 63% of men (source: Harris Poll COVID-19 Tracker Wave 18, 26–29 June 2020). Harris polling data also found that 69% of women felt the economic impacts of COVID-19 would have a bigger effect on their lives than the virus itself (versus 63% of men), and that 47% of women described their primary mindset as “survival mode” – just trying to get through the pandemic day-by-day.