Man-cessions, fiscal policy, and the gender composition of employment

Abstract

In recessions, predominantly men lose their jobs, which has given rise to the term "mancessions". We analyze whether fiscal expansions bring men back into jobs. To do so, we estimate vector-autoregressive models and identify the effects of fiscal shocks and non-fiscal shocks on the gender composition of employment. We show that contractionary non-fiscal shocks lead to man-cessions, i.e. employment falls and more strongly so for men. By contrast, an expansionary fiscal shock predominantly raises the employment of women. Taken together, these results imply a trade-off dilemma for policy that seeks to stabilize the level of employment along with its composition.

Countercyclical Fiscal Policy and Gender Employment

“…Any empirical analysis to identify the impact of fiscal policies on the cyclical gender employment gap should, therefore, control for industry cycles for robustness checks. For the U.S., industry effects alone cannot account for the female employment share over the business cycle (Bredemeier et al, 2017). In the next section, we econometrically examine the causality between fiscal spending shocks and the female share of employment.…”

“…First, the spending shocks may create larger labor demand for female-friendly occupations. Bredemeier et al (2017) show that "pink-collar job" booms are the drivers of the female-biased employment effects of fiscal policy. Second, the shocks may stimulate larger demand for part-time employment (which female workers generally occupy), often hired to meet temporary labor demand.…”

“…Recent empirical studies show that the impact of fiscal policy shocks on growth or employment differs between booms and recessions Gorodnichenko, 2012, 2013;Baum et al, 2012;and Ramey and Zubairy, 2017). Second, the econometric analysis covers all G-7 countries, in contrast to Bredemeier et al (2017) who only focused on the U.S.…”

“…The literature, however, has yet to explore the state-dependent impact of fiscal policy shocks on gender employment. Using structural VAR models-which do not control for the state of the economy-, Bredemeier et al (2017) find that fiscal expansion stimulates predominantly female employment in the U.S. In investigating the impact of fiscal policy shocks on gender gaps in labor markets of the G-7 countries, Akitoby et al (2018) find that an expansionary fiscal policy shock generally increases female employment more than male, thus reducing the gender employment gap.…”

“…5 See also our companion paper Akitoby et al (2018) and Bredemeier et al (2017). 6 Data are seasonally adjusted by using the Census Bureau's X12 filter.…”