Policy Response To Mitigate The Effect Of COVID-19 On Women’s Labor Market Outcomes

Women’s Labor Market

By Tea Trumbic and Marie Hyland

On average, women are under-represented in the labor market compared to men. In many countries, the COVID-19 crisis has caused the gender gap in labor supply to expand. However, there has been substantial heterogeneity between countries. This article explores this heterogeneity in the context of the different policy responses to the crisis

The economic downturn caused by the COVID-19 crisis has been widely referred to as a “she-cession”, and while it is true that women have been disproportionately impacted by the crisis in many countries, there is substantial heterogeneity between countries in the relative economic impact of the crisis on men and women – what we refer to here as the gendered effect of the crisis. The World Bank’s Women, Business and the Law 2021 study, which measures how laws and regulations affect women’s economic opportunity in 190 economies, gathered evidence of different ways that governments and firms have addressed the needs of working parents and essential workers during the pandemic. New studies from India, Italy, Spain, the United Kingdom, and the United States, amongst others, have shown a wide range of impacts of the crisis on the labor market outcomes of men and women and on time spent on unpaid and care work.1

The impact of COVID-19 on women’s economic empowerment can be assessed by looking at many different factors, including wages, productivity, working hours and participation in the labor market. Here we focus on the gendered impacts of COVID-19 through the lens of labor force participation.2 While gains have been made over the past several decades in getting more women into the labor force, women remain under-represented relative to men. As such, it is important to consider how the COVID-19 crisis might pose a threat to these gains and what can be done to keep women in the workforce. This is especially important given that periods of absence from the labor market may have long-term impacts on women’s wages and career progression.3

The economic downturn caused by the COVID-19 crisis has been widely referred to as a “she-cession”

Considering how the labor force participation of women relative to that of men evolved over the course of 2020 across 53 countries where data is available, on average, the gender gap in labor supply expanded slightly in the first quarter, and then continued to expand at an accelerated pace throughout the second and third quarters of the year, before contracting somewhat in the final quarter. While the gender gap at the end of 2020 was wider than it was before the crisis began, it appears to have peaked in the third quarter of the year. These averages mask the fact that the gendered impacts of the COVID-19 crisis have been highly heterogeneous across the world – labor force data from the International Labour Organisation (ILO) shows that, as of the end of 2020, in some countries the gender gap in labor force participation had expanded in some countries, while it had contracted in others. Indeed, as Figure 1 illustrates, of the 53 countries included in the fourth quarter data, the gender gap in labor supply expanded in 25 countries, contracted in 25 countries, and remained unchanged in three. However, Figure 1 also shows that the average expansion was greater than the average contraction.

figure 1

figure 1

While it may be surprising to see that, in several countries, the gender gap in labor supply contracted between the onset of the crisis and the final quarter of 2020, it is not surprising that the economic impacts of the global pandemic have been so heterogeneous. The severity of the health crisis has been highly uneven, with some countries experiencing far higher caseloads of COVID-19, more disease severity, and a higher number deaths than others. Similarly, governments have adopted a wide range of policies in response to the crisis, in terms of both the lockdown measures adopted to curb the spread of the pandemic and the economic and social support programs initiated to help citizens through the crisis.

A team at the Blavatnik School of Government at the University of Oxford have been tracking and comparing government policies adopted in response to the crisis around the world.4 Their 20 indicators cover containment and closure policies, as well as economic and health policies. While the data do not have a gender-disaggregated component, these policies are likely to have differential impacts on men and women. Combining this data on policy responses with labor force statistics, the data show the expansion of the gender gap in labor supply was larger in countries where governments had adopted more stringent containment measures to curb the spread of the virus. In particular, more widespread school closures were associated with a greater widening of the gender gap – a fact highlighted in the World Economic Forum’s most recent Global Gender Gap report.5 This finding concurs with previous research that has shown that, in the United States, the COVID crisis has disproportionately impacted female workers because of the concentration of female employment in the services sectors that were hit hard by lockdown policies, and because the burden of school and daycare closures has tended to fall on the shoulders of working mothers.6

COVID policy response data has also been collected by the World Bank’s Women, Business and the Law team. While the dataset covers a narrower range of policy responses relative to the Oxford data, it gives a more detailed view of those that are targeted at, or have a greater impact on, women.7 The policies tracked fall into three categories: childcare policies, access to courts during the crisis, and health and safety measures.

The need for extraordinary childcare policies was precipitated by widespread school closures. The range of policies adopted by countries include additional family leave granted to parents, childcare subsidies or tax credits, and the provision of childcare services to essential workers. The Women, Business and the Law data provide details of over 100 different childcare measures that were adopted in response to the crisis.

Research has shown that the COVID-19 crisis has led to secondary impacts on the health and safety of women and girls, including a “shadow pandemic” of increased gender-based violence.

As women initiate the vast majority of family court cases globally – including cases related to marriage or divorce, custody of children and requesting protection orders – the ability to access such judicial services is vital for women’s agency. Recognizing this, governments responded to citizens’ needs to access these services in innovative ways. Examples include the prioritizing of matters related to family law, remote access to courts, and automatic extensions of protection orders. In total, the Women, Business and the Law team recorded over 300 different policies adopted by countries across the world to address citizens’ need to access court services during the crisis.

Research has shown that the COVID-19 crisis has led to secondary impacts on the health and safety of women and girls, including a “shadow pandemic” of increased gender-based violence.8 The Women, Business and the Law data show that governments have adopted a wide range of polices to tackle this, including provision of extra health care services, domestic violence hotlines and additional access to shelters. In total, Women, Business and the Law collected data on over 170 extraordinary measures adopted by governments to address health and safety concerns.

Combining the policy response data collected by Women, Business and the Law with labor force data, we see that countries where the gender gap expanded the most had actually adopted a greater number of policies in response to crisis relative to those countries where the gap contracted the most. Countries where the change in the gender gap since the onset of the crisis is in the top tenth percentile of the distribution adopted, on average, seven measures, as recorded by Women, Business and the Law. On the other hand, countries where the change in the gender was in the bottom tenth percentile (those where the gap contracted the most), adopted 5 measures. However, while female employees appeared to have fared relatively worse in economies that have adopted a greater number of gender-sensitive responsive policies overall, the adoption of COVID specific childcare measures is correlated with a contraction of the gender gap in labor supply (Figure 2 on the next page). The fact that the average number of COVID policy measures was higher in countries where the gender gap in labor supply expanded the most may reflect the underlying correlation between the number of measures adopted and countries’ lockdown policies.

figure 2

Conclusion

While it may be surprising to see that, in several countries, the gender gap in labor supply contracted between the onset of the crisis and the final quarter of 2020, it is not surprising that the economic impacts of the global pandemic have been so heterogeneous. No country can reach its full potential without the equal participation of men and women.

The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

About the Authors

Tea Trumbic

Tea Trumbic is a Program Manager of the Women, Business and the Law project at the World Bank. Prior to joining the World Bank Group, Tea worked at the Ministry of Finance of the Republic of Croatia and the International Monetary Fund. She holds a bachelor’s degree in economics from Stanford University and a master’s degree from the London School of Economics.

Marie Hyland

Marie Hyland is an economist at the Women, Business and the Law team. Her research focuses on the impacts of legal reform on women’s economic opportunities and outcomes. Marie holds a PhD in economics from Trinity College Dublin. During her PhD studies, Marie spent time at the University of Maryland as a visiting Fulbright scholar.

Endnotes

  • Alon et al. (2020), Del Boca et al. (2020), Deshpande (2020), Farré et al. (2020) and Sevilla and Smith (2020).
  • Following the work of Djankov et al. (2021), we focus on the gap between the labor force participation rates of men and women. Focusing on the evolution of the gender gap in labor supply allows us to focus on the gendered impacts of the COVID-19 crisis without having to account for the effects that would have impacted labor supply in general.
  • For example, Napari (2010) discusses the “motherhood wage penalty” in the Finnish private sector, and notes that while the penalty erodes over time, it is higher at the top of the wage distribution. Aisenbrey, Evertsson, and Grunow (2009) discuss the relative penalties associated with time out of the workforce for women in Germany, Sweden and the United States.
  • Hale et al. (2020).
  • World Economic Forum, 2021.
  • Alon et al, 2020.
  • World Bank, 2021.
  • Mittal and Singh (2020); Chandan et al. (2020).

References

  • Alon, T. M., Doepke, M., Olmstead-Rumsey, J., & Tertilt, M. (2020). The impact of COVID-19 on gender equality (No. w26947). National Bureau of economic research.
  • Aisenbrey, S., Evertsson, M., & Grunow, D. (2009). Is there a career penalty for mothers’ time out? A comparison of Germany, Sweden and the United States. Social Forces, 88(2), 573-605.
  • Boca, D. D., Oggero, N., Profeta, P., & Rossi, M. (2020). Women’s work, housework and childcare, before and during COVID-19.
  • Chandan, J. S., Taylor, J., Bradbury-Jones, C., Nirantharakumar, K., Kane, E., & Bandyopadhyay, S. (2020). COVID-19: a public health approach to manage domestic violence is needed. The Lancet Public Health, 5(6), e309.
  • Deshpande, A. (2020). The COVID-19 Pandemic and Gendered Division of Paid and Unpaid Work: Evidence from India (No. 13815). IZA Discussion Papers.
  • Djankov, S., Goldberg, P. K., and Zhang, E. (2021). Changes in the Gender Gap during Covid-19. Covid Economics.
  • Farré, L., Fawaz, Y., González, L., & Graves, J. (2020). How the COVID-19 lockdown affected gender inequality in paid and unpaid work in Spain.
  • Hale, T., Petherick, A., Phillips, T., & Webster, S. (2020). Variation in government responses to COVID-19. Blavatnik school of government working paper, 31, 2020-11.
  • Mittal, S., & Singh, T. (2020). Gender-based violence during COVID-19 pandemic: a mini-review. Frontiers in Global Women’s Health, 1, 4.
  • Napari, S. (2010). Is there a motherhood wage penalty in the Finnish private sector? Labour, 24(1), 55-73.
  • Sevilla, A., & Smith, S. (2020). Baby steps: the gender division of childcare during the COVID-19 pandemic. Oxford Review of Economic Policy, 36 (Supplement 1), S169-S186.
  • World Economic Forum (2021). Global Gender Gap Report 2021. March 2021.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.