The gender implications of COVID-19

What is the impact of COVID-19 on women’s participation in the workforce? Elias Papaioannou, Professor of Economics at London Business School and Academic Director of the Wheeler Institute for Business and Development was joined in conversation with Matthias Doepke, Professor of Economics at Northwestern, to discuss how the pandemic is affecting family economics.

  • While previous recessions have hit men harder than women, the COVID-recession will have an outsized impact on women;
  • The gender pay gap will likely widen due to persistent effects of the recession on women;
  • However, changes to workplace dynamics, such as working from home and greater flexibility, will provide an opportunity for a more equitable distribution of childcare responsibilities;

The COVID-19 recession is going to impact men and women differently

Historical recessions have impacted the male and female labour markets to varying degrees. For example, more men than women work in construction, so during the recession caused by the global financial crisis, the pattern of unemployment impacted males more severely.

With the Coronavirus recession, Doepke predicted that women would be more affected. This is because more jobs will be lost in hospitality and leisure, which are sectors with high female participation. Similarly, school and nursery closures will have a larger impact on women because women traditionally provide the majority of childcare in the household, while there are still more single-mother households than single-father. Unemployment figures have borne out this prediction, with the US unemployment report showing women’s unemployment reaching 16%, compared to men’s unemployment which is 13%. This trend is consistent in advanced economies around the world.

While there is the expectation that after the crisis many of those who have lost their jobs will return to their former employers, Doepke thinks the impact of the recession will not be short-lived. This is because the medical crisis will persist, with a vaccine taking a prolonged period of time to be developed, as well any downturn will be self-reinforcing. This is because people losing their income now will reduce their expenditure, which reduces demand for goods across the economy.   

Doepke also considers the impact on women will be different in countries across the world depending on the maturity of the economy. In middle-income countries, women will also be impacted as there is fairly high female participation in the workforce, while in developing countries, lockdown efforts will be difficult to enforce due to larger households and people typically living in close proximity, but women have greater childcare responsibilities.

The long-term impacts on women could lead to lost progress on closing the gender pay gap

Losing a job during a recession has a persistent scarring effect on your labour market opportunities, especially the longer the crisis lasts. After the Global Financial Crisis, the gender wage gap narrowed slightly as more men lost their jobs than women. Therefore, the nature of the Coronavirus recession will likely lead to a widening of the gender pay gap in the medium to long term, as there will be many women with a persistent loss of earnings after the crisis.

However, Doepke thinks there is room for optimism, as the long-term impact of the crisis may lead to changes that ultimately benefit families, such as work flexibility. While women still have the primary childcare responsibilities in the majority of households, changes that enable working from home with greater flexibility will lead to a more equitable distribution of childcare responsibilities. If this trend expands to more of the economy, Doepke expects that some of the persistent gender gaps will decline as a result of the shock.

Businesses need to provide more flexibility for combining work and family obligations

Expectations in the workplace, especially around working hours and work culture, are going to have to shift in order to make it easier to combine a career with a family. Many businesses expect long hours and time after work to socialise with colleagues. Employers are going to have to realise it is possible to do good work and contribute to the company, as well as sometimes leave at 4pm to support with household responsibilities. In Scandinavian countries, this is already the norm, but elsewhere we need a cultural shift, with firms offering more opportunities to work from home, more opportunities for flexible hours, as well as a shift in expectations and the career track because that is a big contributing factor that leads to gender inequality today.

Elias Papaioannou’s conversation with Matthias Doepke is part of the Wheeler Institute’s COVID-19 series – bringing together the expertise and experience of our extended community to understand, illuminate and offer solutions to the challenges created by COVID-19. Our differentiating factor is the role of business in addressing these challenges, with a focus on the implications and actions for those in developing countries. 

If you’re interested in following the Wheeler Institute COVID-19 series, check out our previous episode below.

Elias Papaioannou is academic director of the Wheeler Institute for Business and Development and professor of economics at London Business School, focusing on international finance, political economy, applied econometrics and growth and development.

Matthias Doepke is a Professor of Economics at Northwestern University. He is a former recipient of the Alfred P. Sloan Research Fellowship. His research interests include economic growth and development, family economics, and macroeconomics. Recently, he has worked on the economics of parenting, the economics of fertility, the economics of growth and innovation, and redistributional effects of inflation. He is editor of the Review of Economic Dynamics and Associate Editor of the American Economic Review.

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