August 14, 2020

The surprising picture of women’s economic recovery—it’s not what you think

When the COVID-19-induced economic shutdown first began, it quickly became clear that not everyone was affected equally. In particular, the impact was more pronounced on women than on men. Women accounted for 53% of the 361,000 lost jobs across Alberta, despite making up just 46% of the workforce. The female unemployment rate surged above the male rate for the first time in nearly two years; and labour force participation among Alberta women plunged to its lowest level since the 1980s.

Dire numbers like these prompted several observers to note that COVID-19 was creating a “she-cession”—an economic downturn that disproportionately impacted women. A report by RBC Economics said the pandemic threatened decades of women’s labour force gains. Concerns were raised that family care responsibilities, access to child care, and uncertainty around the return to school in the fall would also prevent women from returning to the workforce. The result would be financial and/or career setbacks for women and a prolonged economic recovery. 

More than three months have passed since the Alberta economy hit bottom. Since then, restrictions have been lifted and businesses have begun re-hiring. But what has that meant for women in the workforce? Are decades of women’s labour force gains at stake or have women recovered more quickly than expected?

Let’s dive into these questions.

First, why were women initially more affected?

The initial shutdown disproportionately affected women largely because they were over-represented in the public-facing industries that were shut down in the spring. The businesses most affected by the shutdown were in the services sector, especially those in accommodation and food services, retail, and non-essential health care and personal services. Women have a disproportionately large share of the jobs in all these industries.

In particular, those were the jobs typically held by younger women. Women aged 15-24 comprise about 6.1% of the workforce in Alberta, but account for 22% of all jobs in accommodation and food service industries; 15% of jobs in information, culture and recreation industries; and 14% of all jobs in retail trade. As a result, employment levels for women of that age plunged by 45% in just two months, compared to losses of about 13% for women over 25.

Meanwhile, the impact in male-dominated fields was less pronounced. To be sure, there were widespread job losses, especially for young men. However, many traditionally male-dominated jobs are in industries like construction, manufacturing, transportation and resource extraction, most of which were deemed essential, thus tempering the effect of the shutdown on men.

What’s happened since April?

There was an early assumption that women would not only be the hardest hit by the shutdown, but they would also be slower to recover. Barriers such as access to child care, family responsibilities, and staged re-opening of female-dominated industries were cited as reasons why women would be even further disadvantaged in the recovery phase. 

Perhaps surprisingly, early evidence suggests that women have been recovering relatively well. While there are a few specific issues worth flagging, on the whole, female employment growth in Alberta has outpaced male employment since April.

That said, because women lost so much ground in the previous two months, they have not yet fully caught up to men in the recovery. In July, male employment in Alberta was at about 93.3% of February levels, while female employment is sitting at 91.5%.

Working-age women are doing especially well. Those aged 25-54 have bounced back from the shutdown better than their male colleagues of the same age range. They’ve regained more of their jobs, their unemployment rate is lower, and their labour force participation rates have effectively returned to pre-COVID levels.

However, one concern for this cohort is that full-time jobs have been slower to come back. There are more women aged 25-54 working part-time today than there were pre-COVID; while part-time employment is 3.2% above February levels, full-time employment remains 6.9% below February levels.   

Younger women are also rebounding. This cohort has seen the fastest overall job growth since April by a wide margin. The problem is that young women lost so many jobs during the initial shutdown that they still have a long way to go to fully recover. While employment for women aged 25-54 is at about 95% of February levels, the same is true for only 82% of the jobs held by young women. This does not seem to only apply to females though, as only 83% of young men’s jobs have come back so far.

Where are there still challenges?

Older women leaving the workforce

Older women are emerging as an exception to the fast rebound for women. Initially, the impact of the shutdown on that age cohort was about the same as for women aged 25-54. However, as time passed and their younger counterparts began to recover, older women continued to lose jobs or not return to work. Employment for that age group kept falling in May and June and only posted a modest uptick in July. At 12.5%, the July unemployment rate in Alberta for women 55 and over is nearly double February levels.

However, this trend appears to be mostly unrelated to COVID-19. Women in this age bracket have been steadily leaving the job market since early 2019, driving down labour force participation and employment for the past 18 months.

Young women not returning to work

The other issue that remains a concern is that women aren’t returning to the labour force at the same rate as men. Men have historically been more active in the job market than women, but that gap has been slowly closing over the decades as more women (and fewer men) look for work. Pre-COVID, about 64.9% of Alberta women either had a job or were actively looking for one. That number dropped to 58.0% as thousands of women gave up looking for work or choose not to due to family obligations, safety concerns, or limited job opportunities in a shutdown economy. Since then, the participation rate has climbed back up to 62.6%.

Meanwhile, men returned to the workforce with a vengeance. By June, the male participation rate had already surpassed February levels (although it dipped back in July).

In part, the gap in labour force participation is the result of older women leaving the workforce as described above. However, there appears to be another, more serious problem: women in their early 20s. Data are not available for Alberta for women aged 20-24, but Canada-wide data suggests that this group has seen a significant drop in labour force engagement. Pre-COVID, men and women of this age range were equally likely to be working or actively looking for a job. During the shutdown, female labour force participation plunged and, as of July, remains well below pre-COVID levels. Meanwhile, young men have more than recovered and are back in the job market.

What can we learn from this?

It’s important to remember that a few months of labour market data are not enough to make a trend. However, early indications do suggest that while women bore the brunt of the COVID-19-related economic shutdown, they appear to be recovering faster than men, making up most of the ground lost in March and April.

Especially telling is that the cohort we would expect to have the greatest child care responsibilities, women aged 25-54, have been the fastest to re-enter the workforce. While this is a promising development, there are still two major lessons/issues that come out of this experience.

First of all, the fact remains that women bore a disproportionate burden at the outset of the shutdown. As such, any future outbreaks, whether in work settings, schools, daycares, or elsewhere are likely to have the same effect again. This means any investment in limiting future outbreaks of COVID-19 and ensuring safe and accessible schooling and child care should be thought of not just as an investment in the health and safety of the province, but as an investment in women.

Second, not all women are sharing in the recovery. The gap in labour force participation by women in their early 20s is a major point of concern for the future as these women are missing out on early work experience, income potential, and career development. If young women are left behind, the economy will feel the ripple effects for decades.

Note: This commentary does not assess the impact of the COVID-19 shut-down, recession, and economic recovery by race or ethnicity, another important factor to consider beyond gender. Statistics Canada just recently began collecting data on race and ethnicity as of July. In future commentaries, we will dig into these important differences, once more data become available to better understand the relative trends and impact for different groups.

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