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Women’s role in labor force continued to grow in August. Is the trend sustainable?

Meghan McCarty Carino Sep 4, 2023
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The growth in the female working population has largely been driven by mothers. Christian Ender/Getty Images

Women’s role in labor force continued to grow in August. Is the trend sustainable?

Meghan McCarty Carino Sep 4, 2023
Heard on:
The growth in the female working population has largely been driven by mothers. Christian Ender/Getty Images
HTML EMBED:
COPY

The national unemployment rate increased from 3.5% to 3.8% last month, but for a positive reason: The labor force participation rate, which is the share of people either working or looking for work, rose to its highest point since the pandemic began.

Increasing the pool of workers in the labor market is key to a “soft landing” for the economy because it takes pressure off wages without people having to lose their jobs. And that labor force expansion in August was largely driven by women.

Historically, women have populated the labor force at lower rates than men. In August, however, the gap shrank to just 10.5 percentage points — the narrowest it’s ever been.

“Men’s labor force participation has been growing, but women’s has been growing by just a tiny bit more,” noted Betsey Stevenson, an economist at the University of Michigan.

That’s been a happy surprise, she said, because job losses and disruptions during the pandemic hit women workers much harder.

“A lot of people, myself included, were really worried that the pandemic would knock these women off course and we would take decades to get back to where we were in 2019,” Stevenson said.

Women’s overall labor force participation isn’t quite back to what it was before the pandemic, but that’s largely due to demographic change, according to Lauren Bauer at the Brookings Institution.

As the baby boomers age, a bigger share of the population is naturally retiring. But for so-called prime-age women — ages 25 to 54 — participation has exceeded its pre-pandemic high.

“These are women who, you know, leave the labor force potentially to care for their young children,” Bauer said. “But now, many more jobs have more flexibility with where the worker has to be.”

Bauer added that continuing to attract mothers to the labor force is crucial for economic growth as the population ages. “Prime-age women, they are the biggest stock of potential workers, but they need support,” she said.

Like child care, for instance. For the past two years, the federal government has been propping up the struggling child care industry with tens of billions of dollars in pandemic relief. But those funds expire this month.

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