COVID Takes Drastic Toll on Women's Participation in Labour Force

COVID-19 has weighed heavily on the decades of gains women have made in Canada's labour force, with more than 1.5 million women losing their jobs in the first two months of the pandemic-induced recession.

The findings are part of a new report from RBC Economics, which shows that women's participation in the labour force has fallen from a historic high to its lowest level in over 30 years.

"Worryingly, the outsized role women play in the industries hardest hit by this recession, together with ongoing uncertainties about availability of school and childcare in the fall, mean this lost ground won't easily be recovered," the report says.

Below is an excerpt from the report, which was published on July 16.  

Pandemic Threatens Decades of Women's Labour Force Gains

By RBC Economics

Canada has been roiled by a recession unlike any other – one distinguished not just by the overall magnitude of damage it has inflicted on the economy but by the specific, unprecedented blow it has dealt to women. In a matter of months, the COVID-19 pandemic knocked women's participation in the labour force down from a historic high to its lowest level in over 30 years.

Beyond the strain these job losses have placed on families and individual women – who have borne the brunt of child-rearing responsibilities as schools and daycares close – their impact on Canada's overall economic growth has been severe. The uneven and slow economic recovery in the second half of the year will leave Canada's economy 5% smaller than before the crisis. With women's employment recovering more slowly than men's, it will likely have a more significant impact on the hit to GDP.

Worryingly, the outsized role women play in the industries hardest hit by this recession, together with ongoing uncertainties about availability of school and childcare in the fall, mean this lost ground won't easily be recovered. As our previous research highlighted, women's increased participation in the labour market has provided an enormous lift to the economy's performance. And this year's recovery likely won't be enough to restore women's participation rate to pre-COVID levels – a factor that carries significant economic consequences. It is imperative that this proves a short-term diversion.

Key findings:

• The pandemic has pushed women's participation in the labour force down to its lowest level in three decades, with 1.5 million women losing their jobs in the first two months of the recession.
• Women's employment, which is dominant in the sectors hardest hit by the recession, has been slower to rebound as the economy reopens. Despite absorbing 51% of job losses in March and April, women accounted for just 45% of job gains in May and June as economic activity restarted.
• Women are more likely to "fall out" of the workforce. Nearly half of newly unemployed women who lost their jobs between February and May (and one-third who lost jobs between February and June) were terminated and did not seek work – putting them at higher risk of long term job-separation and future wage penalties.
• Employment among women with toddlers or school-aged children fell 7% between February and May, compared to a decline of 4% among fathers of children the same age. Single mothers were even more significantly impacted, with employment among this cohort (with a toddler or school-aged child) down 12% from February to June (compared to a 7% decline among single fathers).
• Women accounted for ~45% of the decline in hours worked over the downturn, yet will only account for ~35% of the recovery.

COVID's impact on women's work reverses the pattern of previous recessions

The asymmetrical impact of this recession on women's employment stands in stark contrast to previous economic downturns. Indeed, in prior recessions, from the early 80s to the 2008 financial crisis, men were significantly more likely than women to be laid off. At the peak of the Great Recession, the unemployment rate for men was over 2.5 percentage points higher than that of women, a dynamic explained by the fact that the hardest hit industries were dominated by males. Moreover, women's participation in the labour force rebounded with more vigour in 2009 – hitting its highest level at a time when the participation of men was declining.

Not this time.

From March through June, the unemployment rate of women surpassed that of men for the first time in over three decades.

Why?

In this downturn, the majority of job losses have taken place in female-dominated industries, including accommodation and food services, retail trade, educational services and health care and social assistance – though this story is evolving as the recession wears on. In March and April alone, three of the top five affected sectors were dominated by women, though later in April, as factories and job-sites halted or scaled-down operations, we began to see layoffs more evenly distributed. In May and June, the majority of job creation took place in retail trade, construction, accommodation and food services, and manufacturing.

Considering the industries in which they are most likely to work together with full-time/part-time employment status, we can reasonably expect women to account for the majority of layoffs. And since women account for 56% of new unemployment between February and June, female representation in specific industries, together with their increased likelihood of working part-time, explain women's higher vulnerability to job losses compared to males.

Meantime, women have been largely responsible for combatting the virus on the frontlines of hospitals and long term care homes, with roughly 80% of employment in health care and social services drawn from their ranks.