The retreat from work among men is a topic of great concern for scholars and policymakers. And for good reason: over the past 50 years, the prime-age male employment rate declined by 10 percentage points. While men’s employment rates have dropped in many countries, a drop on this scale is unique to the U.S.
But the story on women’s work is just as important – indeed, arguably more so. In recent years, there has been a reduction in paid work among U.S. women, one that is not paralleled in other advanced nations. Getting more women into the labor market is perhaps an even higher priority than raising male employment rates.
The three main motivations for increasing employment rates are to close skill gaps, boost growth, and cut poverty. In each case, there are good reasons to focus on women’s work.
1. More WORKING women would narrow the skills gap
In an economy nearing “full employment,” many employers are increasingly concerned that workers do not have the right skills for today’s occupational demands. Getting out-of-work adults into the labor force could narrow this “skills gap.” But this is truer for women than for men. Education levels among women who are not employed are higher than for men. Half of the women who are not in paid work have at least some higher education:
The growth in middle-class jobs is also in occupations where women are more concentrated – those in the so-called HEAL professions (health, education, administration, and literacy). The fastest-growing occupations also require more advanced credentials than in the past. So employer complaints of skill shortages might be quelled if some of these well-educated women joined the workforce. Women may also have more of the so-called “soft skills” that employers say are in short supply, and fewer problems like drug addiction.
2. More working women would boost growth
All else equal, adding more workers to the economy will increase aggregate economic output. Bolstering the nation’s GDP is an important goal for policymakers of all political stripes. Improving work rates is one promising way to achieve this growth. Estimating the contribution of higher work rates to overall economic activity is necessarily difficult; it will depend on a range of factors, not least labor productivity.
Say that the employment rate of either men or women could be lifted by 10 percentage points. What would be the economic impact? It would depend of course on the kinds of jobs they took, and the wages they earned. Here we present some very rough estimates, under two different scenarios. In the first, we assume that each additional worker is paid the current median wage for their educational level and gender. In the second, we assume that women earn the same as men, conditional on education: in other words, we assume that there is no gender pay gap. In the first scenario, the economic impact of getting more men into work is greater, despite their lower average education, because they earn more. Under the second scenario (pay parity), the economic impact of getting more women into work is greater, because of their higher levels of education:
Under current conditions (i.e. with a gender pay gap), the economic impact of raising male employment rates is greater (to the tune of $46 billion) than increasing female employment by the same amount. Under conditions of pay equality, the opposite is true.
Under conditions of unequal pay, there is a then a stronger economic argument for raising male employment rates. But there is a circularity to this argument. When women work less, or take more time off work, say to care for children, they end up earning less. This dampens the economic impact of increased female employment; which could in turn be used as a rationale for prioritizing men’s work. And so the cycle turns.
3. More working women would cut child poverty
The best route out of poverty is a job. Wages and salaries make up more than three-quarters of U.S. household income, and much higher fractions among younger, working-age adults. Increasing work rates among low-income households is one of the surest ways to cut poverty. Policymakers are especially, and correctly, concerned about rates of poverty in households with children. From a child poverty perspective, getting more women into work matters more than boosting male work rates. This is because children live with women.
The employment rate of prime-age women with children under 18 in the household is 22 percentage points less than that of men (68 percent versus 90 percent). Some mothers choose to stay at home while their husbands work, but many do not live with a male breadwinner. The employment rates of unmarried mothers is 9 percentage points lower than for unmarried fathers. There are also many more families headed by out-of-work mothers than out-of-work fathers. Among families in which no parent works, out-of-work mothers outnumber out-of-work fathers nearly two-to-one:
Of course these patterns could change, just as the gender pay gap could narrow. In the future there may be as many single jobless fathers as single jobless mothers. But as things stand, it is women’s employment that will make the biggest dent in child poverty rates.
what can we Do about these trends?
None of this is to say that declining male work rates are not a problem. But it is important to be clear what the specific problem is. There may be other reasons to worry about male worklessness, above and beyond the economic ones discussed here. Some commentators fear that being without paid work is more damaging to the psyche, health, and status of men than of women. This may be true. In which case the goal is as much about affecting culture as economics. But if that is the real motivation behind efforts to increase male employment, it would be good to be honest about it.
Meanwhile, in terms of achieving more bread-and-butter goals like closing skill gaps or reducing child poverty, women seem to be a better bet than men. Women also seem to be more responsive to policy interventions aimed at increasing paid work (see, for instance, the recent evaluation by MDRC of Paycheck Plus).
There are other policy changes that might increase female employment, given that women continue to have more responsibility for raising children. The lack of paid family leave and adequate childcare supports are unique to the U.S., and can explain a substantial portion of the decline in female participation rates compared to other advanced economies. Low wages might also play a role – over 90 percent of “homemakers” who are not working (the vast majority of whom are female) contend that they would be willing and able to work if it paid just 10 percent more than their previous job.
Of course, growing the labor force isn’t a zero-sum game. Many of the policies that have been promoted to boost male work rates would benefit female work rates as well. Improved skills training, better adjustment assistance, higher wages, and greater workplace flexibility could all play a role.
Too often, discussions about employment proceed on the unchallenged basis that male employment rates matter more than female ones. But it is far from obvious why that should be the case. Getting more women into work is just as important – and perhaps more so.