This Time it's Different: The Role of Women's Employment in a Pandemic Recession

67 Pages Posted: 18 Aug 2020

See all articles by Titan Alon

Titan Alon

University of California, San Diego (UCSD)

Matthias Doepke

Northwestern University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Jane Olmstead-Rumsey

Northwestern University

Michèle Tertilt

University of Mannheim - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: August 1, 2020

Abstract

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.

Keywords: Business cycle, childcare, COVID-19, Gender equality, gender wage gap, Pandemics, Recessions, School Closures

JEL Classification: D13, E32, J16, J20

Suggested Citation

Alon, Titan and Doepke, Matthias and Olmstead-Rumsey, Jane and Tertilt, Michèle, This Time it's Different: The Role of Women's Employment in a Pandemic Recession (August 1, 2020). CEPR Discussion Paper No. DP15149, Available at SSRN: https://ssrn.com/abstract=3674938

Titan Alon (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

Matthias Doepke

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jane Olmstead-Rumsey

Northwestern University ( email )

Michèle Tertilt

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

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