We're not keeping up

by Dollars and Sense

This is from our pal J-P Ferguson:

There's a good story by Louis Uchitelle, one of the Times's labor reporters, today on how the economic downturn has contributed to a decline in women's labor-force participation.

(I know that household work should be included in any definition of the labor force. I agree that most modern service industries can only be understood as the commodification of previously unpaid domestic work. I'm working with the narrow definitions of the Labor Department for the moment.)

Executive summary: Every recovery since the 1958 recession has ended with more women in the labor force (as a share of all women) than it started with. The 2001-2007 recovery saw a slight drop in participation, though, and that's expected to accelerate as the economy tanks.

It's an interesting empirical phenomenon. You can see how the perceptions of previous decades shaped the interpretation of this data for several years. Academics and policymakers long perceived a large voluntary component in the growth of women's labor-force participation. The quest for social equality, status or something similar was seen as at least as important in drawing women out of the home and into the paid workforce as economic pressures were. Withdrawal from the labor force was also perceived to have a voluntary component: motherhood, spending time with the kids, etc.

Yet of course there was always a counter-narrative based entirely on classic labor-market factors, such as declining real (and sometimes nominal) wages for male workers. I've mentioned before (and I'm hardly alone) that almost all the increase in Americans' real standard of living since the early 1970s has come from increased female labor-force participation. Even that, we think, may be chimeric, because an income scale doesn't correct for exactly the commodification of previously unpaid domestic work necessary to allow many women to operate in the paid labor force. But the bigger point still holds: to stay in place, many households had to add another wage-earner.

Now we're finally noticing the other half of that story. If economic conditions are a better explanation for women entering the workforce than sociological aspirations are, then those economic conditions should also better explain women's withdrawal from the labor force. It's this shift in thinking that Uchitelle's article describes.

I give the dude credit: he explains both the misconception and the realization. So do many of the researchers he quotes:

“When we saw women starting to drop out in the early part of this decade, we thought it was the motherhood movement, women staying home to raise their kids,” Heather Boushey, a senior economist at the Joint Economic Committee of Congress...said in an interview. “We did not think it was the economy, but when we looked into it, we realized that it was.”

I suspect several people are reading this and thinking, "How could they have ever thought that it wasn't the economy, Stupid?" But it's more complicated than that. The US labor force has been dominated by wage earners for about a century. For most of that time, women were disproportionately concentrated in a few industries and occupations. Remedying this, of course, was a major goal of the women's movement. One unintended impact of that odd distribution, though, was that women's employment was less sensitive to general swings in the business cycle than men's employment was. Thus the business cycle (however defined) was never as good a predictor of women's participation and pay as it has of men's.* Go back and look at my earlier post, for example, and you'll see that women's wages rose in the 1970s and early 1980s, against a declining economy, while men's wages declined. Thus the general business cycle's coming to dominate changes in female participation is an empirical change, not just the scales falling from researchers' eyes.

The upshot is that though gender segregation is still widespread in the US, especially by occupation, it has decreased enough over the last generation that women as a group now resemble men in their vulnerability to business cycles. Talk about a bittersweet finding!

This doesn't imply that women are paid or treated the same as men in all jobs, of course, As the article continues:

The women, in sum, are for the first time withdrawing from work with the same uniformity as men in their prime working years. Ninety-six percent of the men held jobs in 1953, their peak year. That is down to 86.4 percent today. But while men are rarely thought of as dropping out to run the household, that is often the assumption when women pull out.

“A woman gets laid off and she stays home for six months with her kids,” Ms. Boushey said. “She doesn’t admit that she is staying home because she could not get another acceptable job.”

* If you remember Gary Becker's dictum that discrimination acts like a constraint on free-market activity then this makes complete sense. (I agree with Becker's metaphor, though I disagree with the ways he tried to push it.)

Labels: Louis Uchitelle, recession, women's labor-force participation

 

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7/23/2008 09:47:00 AM