Coronavirus causes women short-term pain, but may lead to long-term gains

In stark contrast to previous recessions, women have borne the brunt of the economic carnage wrought by coronavirus. However, in the long run, women may end up benefiting as the pandemic encourages remote work and the establishment of more egalitarian social norms regarding childcare.

A recent paper by Professor Titan Alon (University of California at San Diego, USA) and colleagues makes this argument, noting that in traditional recessions men suffer sharper rises in unemployment than women, as construction and manufacturing – which are disproportionately staffed by men – are typically two of the most heavily impacted sectors.

Moreover, married men losing their jobs increases the rate at which their spouses enter the labor market as households try to maintain their income. The result is that contractions such as the 2008 global financial crisis lead to a decrease in the gender pay gap.

The current pandemic-induced recession is unique in that social distancing, including the severe lockdowns imposed by governments, is the primary cause of the recession, which has led to a fundamentally different sectoral impact. High-contact sectors, such as hospitality and personal services, are the worst hit, and they are characterized by much higher levels of female participation. This is one reason why US unemployment from February to April increased 13 percent for women, compared to 10 percent for men.

The other reason this pandemic is unique is the childcare quandary that many households have faced. In principle, the challenge of looking after children while performing a job is gender-neutral: Men and women are equally equipped to respond, and are equally responsible. However, cultural norms mean that many households consider women to be more effective and more responsible caregivers. As a result, some women are forced to cut back their hours or leave their jobs entirely, while those who continue to work fulltime may struggle to be as productive as usual due to the pressure of multitasking.

Women sew protective suits, following the outbreak of the coronavirus disease (COVID-19), at a factory in the holy city of Najaf, Iraq June 10, 2020. (Reuters)

The effect on women of partially or completely withdrawing from the labor market extends beyond the foregone earnings: the skill-building process is interrupted, leading to a wage gap that widens over time. Professor Alon and his coauthors develop a model of the economy that takes into account the gender-differentiated impact of a recession, and find that pandemic-induced contractions increase the male-female wage gap by 5 percentage points, as compared to regular recessions, which close the gap by 2 percentage points.

Yet, not all is lost, as these short- and medium-term dynamics can be trumped by persistent, structural changes to the economy brought about by the pandemic.

The first concerns the shift to remote work. In traditional workplaces, for most professions, it is impossible to reconcile going to work with caring for children during a pandemic, forcing families with two working parents to designate one – typically the woman – as a fulltime caregiver and tutor. Since most jobs cannot be halved, and men typically earn more than women, even egalitarian-minded families are forced to forego the woman’s job in an attempt to maximize household income.

Remote work helps families circumvent this unfavorable dilemma, as it allows both parents to contribute to childcare; and can even allow single-parent households to continue working while looking after children.

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In many industries, the cost of investing in remote work infrastructure, both physically and conceptually in terms of managerial systems, is a primary barrier to remote work. Pandemics can force these investments upon companies, leading to a permanent and favorable transformation of the childcare dilemma faced by families.

The second change is in the social norms regarding childcare. During a pandemic-induced recession, in some households with two working parents, the man will be laid off, while the woman will retain her job, forcing the man to become the primary care giver. And while women are still losing jobs disproportionately to men, it is still the case that when a man loses his job, it indirectly contributes to more egalitarian norms. This helps the family to overcome any pre-existing bias toward requiring the woman to take the lead in looking after children even if she is working. In the long run, this contributes to a more egalitarian attitude toward both spouses’ professional and domestic responsibilities.

Despite the insights provided by Professor Alon and his colleagues’ model of the economy, it is worth noting that it abstracts from other important factors that determine male-female differences in the impact of a recession. In particular, there are widespread concerns that lockdowns have contributed to increased levels of domestic violence, where women and children are disproportionately represented among the victims. Therefore, it could be that the long-run benefits accruing to women in the labor market are offset by the damage associated with increasing domestic violence.

One of the difficulties that economists face in modeling such phenomena is that data on domestic violence targeting women is inherently less available and less accurate than the data on female employment and wages. This underscores the importance of combining the quantitative approach of scholars such as Professor Alon and his colleagues with the qualitative insights emerging from sociology.