Seven lessons on how recessions impact women

MartinJenkins
May 4, 2020 · 5 min read

With Senior Consultant Mette Mikkelsen / 4 May 2020

1. Recessions hit women in two waves

International evidence shows that in past recessions, men have tended to lose their jobs at a slightly faster rate than women. A key reason is that men are overrepresented in cyclical sectors such as construction, agriculture and manufacturing, which tend to be more severely affected by any economic downturn. However, while the impacts of a recession on women tend to be less immediate, they are no less severe.

Women are already economically disadvantaged when entering a recession — for example, the gender pay gap in New Zealand is 9.2%. When austerity measures are introduced following a recession, women have experienced a ‘second wave’ of job losses due to being overrepresented in the public sector (for example, in education, social services and health). Austerity measures have added disproportionate negative effects on women, as services that support female employment, such as childcare, are cut back.

2. Non-white women are disproportionately affected

In the United States, black and Hispanic women saw a steeper decline in job losses after the global financial crisis (GFC) than white women. They continue to experience higher unemployment rates than white women today.

Between 2007 and 2010, labour market participation for white women in the US declined 0.5 percentage points, while black women experienced a steeper decline of -1.2 percentage points, and for Asian women the figure was -1.6. In the US public sector, the unemployment gap between black and white women grew nearly six-fold between 2008 and 2011.

In New Zealand, the unemployment rate among Māori women (12%) is higher than that of Māori men (10.8%) and more than double the national average. This means that when entering a recession, Māori women are already significantly disadvantaged.

Non-white women are disproportionately affected in recessions. Image source: Unsplash

3. Impacts on women’s overall workforce participation rates vary

In the US, the global financial crisis reduced women’s participation in the workforce. After a long-term upward trend until 1999, the rate had already slowly started to decline, but the GFC caused a steeper decrease from 2008 — a trend that has not been reversed.

In New Zealand, however, the labour force participation rate for women continued its long-term upward trend throughout the economic downturn, increasing 0.9 percentage points between December 2007 and September 2013.

4. Motherhood has an added cost

In past recessions, single mothers have experienced higher unemployment rates than mothers who have a partner. One explanation may be that when jobs are scarce, it may be more attractive for employers to hire mothers who can share childcare with a partner.

Women with childcare responsibilities have also been disadvantaged compared with men or other women in continuous employment, due to restricted internal labour markets and employer perceptions that these women are unreliable or can’t work flexibly.

Women on maternity leave may also be disproportionately vulnerable to job losses during a recession. Research by the UK Government Equalities Office during the GFC showed that one quarter of men believed that in difficult economic times it made ‘more sense for people on maternity leave to be made redundant first.’

Motherhood has an added cost during a recession. Image source: Unsplash

5. The burden of unpaid work increases

Globally, women do three times as much unpaid care work as men on average, according to a recent article by UN Women. The disparity has been made worse by COVID-19: ‘Now, formal sector female employees with children are balancing one or more of the following: work (if they still have it), childcare, homeschooling, elder care, and housework. Female-headed households are particularly vulnerable.’

New data from the United States shows that COVID-19 social distancing measures have had a significant impact on sectors with high rates of female employment. Closures of schools and daycare centres have vastly increased childcare needs, which has had a particularly large impact on working mothers.

6. Redundancy data may not tell the whole story

The data on redundancy rates for men and women in recessions may not be telling the whole story.

For example, in the UK in the aftermath of the GFC, the redundancy rate for men was 14.1%, versus 8.3% for women. However, what those bare statistics don’t convey is that women are less likely than men to have worked continuously due to having children and are more likely to work on temporary contracts, and this means they are often ineligible for redundancy payments in the first place.

7. Changing norms after COVID-19 could positively impact women workers

Beyond the immediate crisis, COVID-19 may ultimately promote gender equality in the labour market. The first reason is that organisations have been forced to adopt flexible work arrangements, and this may continue after the pandemic.

Second, many fathers have taken primary responsibility for childcare during the crisis, or a larger share than previously. This may erode the social norms that have led to a lopsided division of labour in housework and childcare.

Flexible work and fathers taking more responsibility for childcare may become more normal after COVID-19. Image source: Unsplash

This is an excerpt from a rapid review by MartinJenkins on the impact of economic shocks on vulnerable workers. Please contact doro.mueller@martinjenkins.co.nz for the full rapid review, and for the first rapid review on general labour market impacts.

About the author

Mette Mikkelsen is a policy expert with rich experience working for the United Nations, government agencies and not-for-profits, Mette is adept at providing strategic advice to policymakers and managing and evaluating complex programmes. Mette works remotely for MartinJenkins from London.

Senior Consultant Mette Mikkelsen

Please give this article a clap, email MartinJenkins at admin@martinjenkins.co.nz and follow us on LinkedIn and Twitter.

From the Exosphere

From the Exosphere is a platform for sharing thoughts from…

From the Exosphere

From the Exosphere is a platform for sharing thoughts from the team at MartinJenkins. The exosphere is the last layer of atmosphere before space, offering an unrivalled view of our blue planet and where we might go next.

MartinJenkins

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From the Exosphere

From the Exosphere is a platform for sharing thoughts from the team at MartinJenkins. The exosphere is the last layer of atmosphere before space, offering an unrivalled view of our blue planet and where we might go next.

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