DP15149 This Time It’s Different: The Role of Women’s Employment in a Pandemic Recession
In recent US recessions, employment losses have been much larger for men than
for women. Yet, in the current recession caused by the Covid-19 pandemic, the
opposite is true: unemployment is higher among women. In this paper, we analyze
the causes and consequences of this phenomenon. We argue that women have
experienced sharp employment losses both because their employment is concentrated
in heavily affected sectors such as restaurants, and due to increased childcare
needs caused by school and daycare closures, preventing many women from working.
We analyze the repercussions of this trend using a quantitative macroeconomic
model featuring heterogeneity in gender, marital status, childcare needs, and human
capital. Our quantitative analysis suggests that a pandemic recession will i)
feature a strong transmission from employment to aggregate demand due to diminished
within-household insurance; ii) result in a widening of the gender wage gap
throughout the recovery; and iii) contribute to a weakening of the gender norms that
currently produce a lopsided distribution of the division of labor in home work and
childcare.
