Saturday, December 13, 2014

Going Home. Are US Women Leaving The Labor Market And If So, Why?

The New York Times is running a long series on the US employment situation.  Yesterday it ran a story of American men without jobs, today a similar type of story ran on American women.  It's the latter that requires some extra attention here.

It's not a bad story at all.  It looks well-researched and it points out the lack of government policies which would help women with children to stay in the labor force.  That lack is reinforced by the cultural norms which expect mothers to do all the hands-on child-care. 

But those problems have existed in the US for ever.  They are not new policies, and as such they cannot explain the crucial statistics the article quotes, these:

As recently as 1990, the United States had one of the top employment rates in the world for women, but it has now fallen behind many European countries. After climbing for six decades, the percentage of women in the American work force peaked in 1999, at 74 percent for women between 25 and 54. It has fallen since, to 69 percent today.
The article notes that countries such as Sweden, Norway, Switzerland, Canada, France, Britain, Denmark, Portugal and Japan all have higher labor market participation rates of women than the US, and the reasons for those differences are at least partly in the lack of paid parental leave and good subsidized daycare in the US.  Still, the drop in the US women's labor market participation rate from 1999 to 2013 has a better explanation than this:

But the failure of the United States to meet the needs of working parents doesn't respond to the headline of the piece, "why U.S. women are leaving jobs behind." The answer to this question is very clearly the state of the economy. After all, the employment to population ratio (EPOP) for prime age women peaked in 2000 at 74.2 percent, coincidentally the peak of the business cycle. After the stock bubble burst and threw the economy into recession in 2001 the EPOP for prime age women declined. It bottomed out at 71.8 percent in 2004 and then started to rise as the economy began to create jobs again. It peaked at 72.5 percent in 2006 and 2007 and then tumbled to a low of 69.0 percent in 2011. Since then it has inched up gradually as the labor market has begun to recover from the downturn.
I agree with that quote.  Note, especially, how the EPOP has varied within a short time period.  Those changes cannot be explained by the lack of support for working parents (read: mothers), because that lack of support has been fairly constant.

An interesting problem in stories like this one (or any stories which use interviews with individuals as anecdotes) is that the anecdotes appear to support the stories (women wishing to work but unable because of child-care obligations), simply because the interviewed people are telling the truth about their lives.  But the people picked for the interviews are selected to go with the plot the author(s) wish to follow.  Similar stories could have been told at the peak of the business cycle in 2000 or at any time, pretty much.