This Time It's Different: The Role of Women's Employment in a Pandemic Recession

Abstract

In recent US recessions, employment losses have been much larger for men than for women. Yet, in the current recession caused by the Covid-19 pandemic, the opposite is true: unemployment is higher among women. In this paper, we analyze the causes and consequences of this phenomenon. We argue that women have experienced sharp employment losses both because their employment is concentrated in heavily affected sectors such as restaurants, and due to increased childcare needs caused by school and daycare closures, preventing many women from working. We analyze the repercussions of this trend using a quantitative macroeconomic model featuring heterogeneity in gender, marital status, childcare needs, and human capital. Our quantitative analysis suggests that a pandemic recession will i) feature a strong transmission from employment to aggregate demand due to diminished within-household insurance; ii) result in a widening of the gender wage gap throughout the recovery; and iii) contribute to a weakening of the gender norms that currently produce a lopsided distribution of the division of labor in home work and childcare.

“I was facilitating everybody else’s life. And mine had just ground to a halt”: the COVID-19 pandemic and its impact on women in the UK

“…Coupled with an unsupported childcare sector (Lewis and West 2017), a significant reduction in female participation in the labour force and an increase in the gender pay gap could last for a number of years (Alon et al 2020).…”

“…Bandiera et al (2019) have shown that the impact of these closures were long-lasting: 13 months after the start of the crisis 63% of men had lockdowns (e.g. tourism and hospitality) and the gendered norms related to childcare when schools and nurseries close coupled with restrictions to kinship care (Alon et al 2020).…”

IT Shields: Technology Adoption and Economic Resilience during the COVID-19 Pandemic

“…Some papers have documented that more economically vulnerable individuals-such as those with lower income and educational attainment [Cajner et al, 2020;Chetty et al, 2020;Shibata, 2020], minorities [Fairlie et al, 2020], immigrants Borjas and Cassidy [2020], and women [Alon et al, 2020;Del Boca et al, 2020;Papanikolaou and Schmidt, 2020]-have been impacted more harshly during the early phases of the COVID-19 pandemic, both in the US and other countries [Alstadsaeter et al, 2020;Béland et al, 2020]. One reason is that lower paid workers are often unable to perform their jobs while working from home [Dingel and Neiman, 2020;Gottlieb et al, 2020].…”

Labor market policies during an epidemic

“…Our paper is closely related to studies that analyze the labor market effects of the epidemic. (see Alon et al, 2020;Boar and Mongey, 2020;Fang et al, 2020;Giupponi and Landais, 2020;Gregory et al, 2020;Kapicka and Rupert, 2020;Mitman and Rabinovich, 2020). Relative to this literature, we jointly study UI and payroll subsidies and analyze their differential effects on the labor market.…”