Creating Pathways for Women to Build Stronger Financial Futures

As a group, women are experiencing some favorable economic trends right now. The wage gap is the smallest it’s ever been, with women now earning nearly 80% of what men make. Labor force participation for women is strong, having peaked in 1998 and recovered from a slight dip during the Great Recession. Meanwhile, men’s participation in the labor force, while higher than women’s, has consistently fallen.

Women also hold a much greater share of payroll jobs than they did before the recession. They are getting more education than men, and job growth has been greatest in sectors that are more favorable to women, including health care, education and, to some extent, government.

On the home front, men are providing more family care than they used to. Men have increased their time taking care of children and now provide about one-third of elder care, although they don’t usually take work time off to do so. With children, they spend time in play and sports, particularly with older children, and with elders, they tend to take on the less hands-on tasks, like paying bills and scheduling doctors’ visits. Women continue to assist with needs like bathing, dressing, and other daily activities of life. Still, the increased participation of men in family care means that it is easier for women to remain in the workforce.

Another piece of good news is the increase in paid family leave. In the past 15 years, California, New Jersey, New York and Rhode Island, as well as the District of Columbia, have enacted paid family leave laws. In these states, anyone on a company payroll must have access to paid family leave, ranging in duration from four to eventually 12 weeks. Some large employers, like Google and Facebook, have increased their family leave benefits to four months or more.

Research shows that when women have paid family leave, they are more likely to return to work sooner and work more hours. Increasing paid family leave benefits their long-term financial well-being.

Despite Progress, Challenges Remain

It’s not all roses, though.

At the current rate of progress, the Institute for Women’s Policy Research projects that the wage gap won’t close until 2059.

For example, while it’s true that the wage gap has narrowed substantially over the years, it is narrowing more slowly now than before. At the current rate of progress, the Institute for Women’s Policy Research projects that it won’t close until 2059.

Source: IWPR calculations based on the 1960, 1970, 1980, 1990, and 2000 Decennial Census (for the calendar years 1959, 1969, 1979, 1989, and 1999) and the 2001–2015 American Community Surveys (Integrated Public Use Microdata Series, Version 6.0).

Although women have fared better than men with respect to employment recovery since the Great Recession, they also lost a tremendous amount of wealth in the form of retirement savings and home equity. Women of color were particularly hard hit; many of them lost their homes at the same time they lost their jobs and depleted their retirement savings to meet daily expenses.

And despite progress, only 14% of women have access to paid family leave through their employers. Only 15% of all children eligible for subsidized child care get it because so few dollars are available. Women who continue to shoulder their families’ caregiving needs still lose earnings — and savings.

During their working years, women earn less than men and spend more uncompensated time out of the workforce than men to provide family caregiving — not just for their children, but for elderly parents or other family members who are sick or in need. This results in fewer lifetime savings so that when women reach retirement age, they have fewer resources than men to finance more remaining years of age.

Given women’s roles not only as workers but also as child bearers and caregivers, investing in women’s financial well-being and security has broad implications for benefiting children and the elderly. However, making this type of investment will require both political will and recognition that too much of what’s been labeled “women’s work” has been undervalued.

Policy Changes to Support Financial Well-Being for Women

What can be done to improve the financial health and security of women?

Laws or policies that keep women either in the labor market or attached to it would be a helpful start. Such policies would include measures that protect women’s employment; provide paid family leave; create subsidized, reliable, quality child care for low- and moderate-income women; and expand access to universal pre-K and before- and after-school care programs.

We also need laws and policies that support equal pay — for example, by creating more parity between part-time and full-time jobs. Employment benefits such as health insurance and retirement plans build wealth, but they typically are available only to people in high-paying, full-time jobs. Establishing those benefits for part-time and lower-wage workers would improve women’s financial security.

We should also take a serious look at revaluing the work that women typically do so that they are paid more fairly for their skills. Many so-called “women’s professions” — including beauticians, child care workers or home health aides, to name a few — require professional certification or an Associate’s degree. Nevertheless, women in these jobs typically earn very little money, especially compared to their male counterparts. We should increase pay for caregiving overall, as this profession has been greatly undervalued.

In addition, we should look at ways to provide greater financial stability to women when they grow old and leave the workforce. Women typically live 5–10 years longer than their husbands but have fewer assets to support those additional years. Divorced women, widowed women and women who have never married all tend to do poorly in retirement, with poverty rates of 15–20% — significantly higher than the overall U.S. poverty rate of 13.5% in 2015.

Strengthening the Social Security survivorship benefit for widows would help many women, as would finding a way to provide greater benefits to lower-earning divorced and never married women, who often provide care to children, parents, and other relatives. Adding a caregiving credit to Social Security could increase retirement income for women — and men — who cut back on work to provide care for a family member.

Many policy changes that would help women would benefit others as well. For example, improving our elder care system would better serve all elderly people and their families, but it would particularly benefit women, both as caregivers and as people in need of care when they reach old age. Creating new subsidized savings vehicles with federal or state matches could help everyone, but women would benefit particularly because of their historically lower savings than men. And, making higher education free would help not only young people but also retired people, many of whom have school loans on their books for children or grandchildren.

If all things were equal — including lifetime incomes, an end to discrimination against women, and equalized and fully compensated caregiving burdens — women would have the capacity to build wealth in the same ways that men do. And that’s to everyone’s benefit.


by Heidi I. Hartmann, President, Institute for Women’s Policy Research

Read Heidi’s What It’s Worth essay on building economic security for women.