2 things holding women back in the workforce 2 things holding women back in the workforce

July 2, 2024

Runtime: 19:44 — The female workforce participation rate has flatlined in the U.S. over the last 30 years. Why? One reason is a lack of state-funded “family policies,” like child care. Meanwhile, the rise of so-called “performance pay” has left some women behind.

The number of U.S. women working was on the rise for 40 years after World War II. Then, something changed. The rate flatlined in the ‘90s, and the U.S. went from having one of the highest female workforce participation rates among industrialized countries to one of the lowest.

There are several reasons why, and we look at two of them. Both are related to child caregiving duties, which tend to fall heaviest on women. One is the rise of so-called “performance pay.” This pay is often found in lucrative jobs that can demand 70- to 80-hour work weeks – which shuts out most women with caregiving duties.

The second is a lack of state-sponsored “family policies” in the U.S., such as child care and parental leave. These make it easier for women to work, and other countries have prioritized them. But the U.S. has not. Now, women here face barriers to work that women in other countries don’t.

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In the decades following World War II, the number of American women working was on the rise.

Official data on U.S. labor force participation rates go back to 1948. At that time, only about a third of women aged 16 and older were either working or looking for work.

But by 1990, more than 57 percent of all adult women were in the labor force. And among so-called prime-age women, those aged 25 to 54, the 1990 participation rate was almost 75 percent.

Then, after 1990, something changed. Here’s University of Miami economist Stefania Albanesi.


Of course, there were ups and downs related to business cycle variation and so on after that. But, effectively, the upward trend in women's labor force participation stopped in the mid '90s.


But other countries didn’t see their female participation rates flatline. And many of them left the U.S. behind.

When 1990s began, workforce participation rates among prime-age U.S. women was ranked near the top of all industrialized countries. By 2019, it had slipped to near the bottom.

What happened?

Albanesi says one clue can be found in who exactly is responsible for the stagnation in participation.


It's coming completely from married women.


An obvious explanation for this is that married women are stepping back from work because they’re having children.

But that’s not close to a complete answer.

I’m Jay Lindsay, and this is Season 6 of Six Hundred Atlantic. This season, we’re focusing on the concept of “full employment,” which was the topic of the Federal Reserve Bank of Boston’s 67th economic conference.

As part of its dual mandate, Congress requires the Fed to promote “full employment” along with “stable prices.” Full employment is essentially an economy in which everyone who wants to work can work as much as they want.

As part of fulfilling the full employment half of its mandate, the Fed needs to understand which groups are facing barriers that stop them from working at their max potential. And the data clearly indicate women are one of those groups.

So, what exactly is holding women back?

That question has a lot of an answers. At the conference, Albanesi presented a paper that looked at two of them.

One is the rise of so-called “performance pay.” This is when workers get bonuses or commissions based on achieving some performance metric – maybe a sales goal or getting a company’s stock price to a certain level.

Jobs based on performance pay are often lucrative but extremely demanding, requiring long hours with little-or-no work-life balance.

These kinds of jobs can also fall into the category of what Nobel Prize-winning economist Claudia Goldin calls “greedy jobs.” Such jobs require 70- to 80-hour work weeks, with little choice about when those hours are worked. And she says the number of “greedy jobs” is increasing. 

Women caring for children often need flexibility that greedy jobs don’t provide. Some women with kids are falling behind male colleagues in salary. Other women are switching career paths. Still others are dropping out of the workforce altogether.

A second barrier to work that Albanesi addressed at the conference is a lack of public money for what she called “family policies” – like paid parental leaves or child care.

The U.S. has fallen far behind other wealthy nations in its support for family policies. And University of Michigan economist Betsey Stevenson says if it hadn’t, the country’s female workforce participation rates might not be lagging.


I think a lot of research has pointed to the failure of the United States to adapt family and workplace policies to support working families.

There's been a lot of resistance, and I think that resistance is unfortunately misplaced. It's a resistance that thinks, “Well, companies should be able to do whatever they want, and this is just going to restrict companies.”


But Stevenson says that fails to recognize we’re in a new era of work.


What we really need is a coordinated societal change to recognize the shift from one era, an era in which most families had one working parent and another parent who was either non-working or a secondary earner, so not a primary earner, to a world in which most families, all parents are primary earners.

So, an optimistic look, this is very solvable. We could change our policies tomorrow. A more pessimistic look is that it really does require a very different way of thinking that has proven quite stubborn in the United States.


Albanesi says it’s important to note that the married women driving the trend of lower female workforce participation includes all married women. Not just those with children.

Certainly, some married women never want to have children. But caregiving duties still loom as a huge influence on work in the broader group of married women. Albanesi notes that extensive literature indicates that many women consider their caregiving duties when making work choices – even if there’s no baby to care for yet.

They’ll choose a career or job that gives them flexibility, or lower hours – and often less money or lower career prospects. And they’re doing it to secure whatever conditions they think will make it easier to hold the job when they do become mothers.


It's not just that certain mothers have no, say, child care options and then must leave the workforce. It's not as simple as that. It's that the perspective of becoming mothers is affecting women throughout their careers.


All of this speaks to the fact that – even as parenting norms have evolved over the years – women today are still most often their children’s primary caregiver.

It’s not that fathers don’t do anything, of course. It’s just that mothers often do more, and at levels that have a greater impact on their work lives.

Stevenson compares the dynamic of mothers and fathers doling out caregiving responsibilities to a game of “chicken” that mothers often lose.


And so, you can just have these slight differences in who's going to be willing to take a risk around the kid not being picked up on time, or the lunch, some sort of caregiving need not being met. And if women are just less tolerant of the potential of having a caregiving need for their children get unmet, then in that game of chicken, they're going to pick up the caregiving responsibility faster. And then the next thing you know, they have more of the caregiving burden.


That matters for a lot of reasons, but certainly when we consider the rise of performance pay in the 1990s.

Albanesi notes performance pay tends to be common in professional managerial occupations. And because those jobs often demand hours caregivers just can’t give – because, for instance they might need to pick up a couple of toddlers from daycare – there is likely to be fewer women in those upper echelon roles.

She says that’s expanded the gender wage gap and likely limits female workforce participation.


So, that is very hard to measure, but you do see that these professional managerial occupations are still very, very male dominated. And I think there might be barriers for women entering, despite their educational qualifications and early career experiences, that have to do with caring responsibilities. But then even for women who don’t have them, it may be harder to rise to the top in positions that are excessively male-dominated.


Stevenson says greedy jobs are a little like toddlers themselves.


So, Claudia Goldin describes greedy jobs as jobs where there is no tolerance for you not giving them 100% of your attention on their terms, on their timeline. They throw impossible tantrums if you can't drop everything for them. That sounds like a toddler to me.


Jess Little has some experience with highly demanding jobs.

She’s a mother of three from Newburyport, Massachusetts, who came to Boston from Seattle to go to school at Northeastern University.

Then, she met a guy in the startup community they both work in. They fell in love, got married, and had their third child in November of 2023.

Her expertise is helping startups with their operations, sales, products, and partnerships, and she has loved her work. But 60-hour weeks have been common, and so has a mentality that more time equals more commitment. She said that can be a big disadvantage when your kids are demanding your time, too.


What I've seen, at least in the industries that I've worked in and being in tech, and often needing to say, “Hey, I need to rearrange my schedule or miss out on this meeting, because I need to go pick up my sick kid from daycare,” or what that looks like. Often, you're seeing that's the woman in a lot of these companies that's needing to do that, and constantly it makes it look like the kid is a burden versus being an actual priority, which I think is unfortunate.


Stevenson said rather than just accepting the rules greedy jobs make, we should be thinking about ways to rein those jobs in.

She says it’s not just mothers who pay the price with lower earnings or opportunities. It’s also the fathers who are giving so many hours to work instead of their children. Stevenson calls that sacrifice the “fathering forfeiture.”


The motherhood penalty is what women give up in their careers, in their earnings, to be moms. And for every mom out there who is giving up a little bit of earnings to take on more of those parenting responsibilities, there's a dad out there that's not getting very much time with their kids. And that's what I mean by the fathering forfeiture, is dads who are unable to play a role of parenting. And what the child development literature shows is kids actually benefit from having their dads around.


Stevenson adds that fathers benefit, too.


And they, in surveys, are saying that they feel an impossible burden between work and family because for them, they are sticking with work. And what they’re doing is giving up time with their kids. Women face the same challenges, but they're giving up work and staying with their kids, and they're less likely to say that it's a challenge because they're making a tradeoff that's more balanced, frankly.


In the 1990s, when performance pay was on the rise, so was support for family policies. Governments around the world were increasing funding for parental leave, child care, and other things that can make it easier for women to work. But not in the U.S.

And Albanesi says that lack of support presents real barriers to work that women in other countries don’t face today.


They have improved their family policies substantially. And in the U.S., there's virtually been no progress except for some programs in a few states, since the early '90s.


The high cost of child care was a big reason accountant Wendy Ayanbeku, a mother of three from Randolph, Massachusetts, stepped back from full-time work after she had her third child.


It wouldn't be a good financial situation for me to now put all three of our children in daycare, and then for me to take a position. I would honestly be trading off my time just to pay off daycare.


Unfortunately, child care costs don’t look to be dropping any time soon. But mothers may be finding some relief in a way of working that was a necessity during the pandemic and has lasted beyond it.

Albanesi noted in her paper that the emergence of remote and hybrid work could help clear work obstacles for women. That’s because the flexibility it offers can help women better plan and balance their work and caregiving obligations.

It also may help explain recent post-pandemic gains among prime-age women in labor force participation. The rate moved up rapidly during the recovery and now exceeds pre-pandemic levels.

Boston Fed economist Chris Foote says he didn’t think remote and hybrid work would prove this enduring. And he says that could have significant benefits for women in the workforce.


To be honest with you, I'm surprised as a labor economist that it has been as resilient as it has after the pandemic, that we're still seeing occupancy rates in some big cities among offices at 50% or something like that.

It's not a law that's being passed, but it's a technological development that is actually favoring participation among women, where other developments, like the emergence of greedy jobs or performance pay, has worked against women. So maybe here with working from home, married women are catching a break.


Stevenson notes, though, that the promise of hybrid and remote work has its limits. For instance, trying to work with a 4-year-old in the house requires something extra, whether it’s the attention you normally would be paying to your job or the dollars you are paying for an in-home babysitter.

Jess says it’s just an inescapable fact that balancing career and motherhood is going to come with costs. She vividly remembers the moment last year when she realized it was time for her to step back from full-time work.


So, I think for me it was the realization one particular event happened that's sticking in my mind, taking my daughter, my oldest, to her swim class at 4:00 in the afternoon and taking her and being on Slack on my phone simultaneously, not watching her and she's being like, ‘Hey mom, look at me, look at me.’ And I'm literally responding to my boss via Slack answering some questions. And in that moment, it was that realization that I'm not paying attention to her and something that she's loving and enjoying. I'm also not doing well on answering a response to my boss at the same time. And it was just that moment of feeling, I think guilty on both sides where I wasn't able to give what I needed to give to either party.

You can't have it all, and us as women, we're often told, you can, you can, you can have it all, you can have the career, you can have the family and this and that. You really can't. I think it's just a simple way to say, ultimately, you're going to realize what's important and how to kind of shift and make those things a priority.


Wendy has a slightly different take.


You can have it all, just not at once. So, I don't believe that I'm stopping anything that I'm doing because I have children. I just know that I can't do it all at once.

You cannot be the best in your career and be the best parent and be … you have to pick and choose. It's like, right now I'm taking a back seat to my career because I know the position I'm in, I can do it.

I can't call for the hours that they need, or I can't call for the reports they might need me to generate in a higher position, because I know that I have to balance taking care of my kids. So, it's like when I get a hold of the children being in school, and things are different, then maybe I'll be able to take the next step in trying to push my career. If that's the choice I want to take.


Women like Wendy have been making tough calls about work and family for a long time, because working mothers have been an important part of the economy for a long time. By comparison, gig workers just barely got here.

But the wide range of work opportunities the internet has enabled – like with ride-sharing giants Uber and Lyft – have fueled the growth of this new class of worker.

These gig workers see these jobs as anything from a side hustle to their primary sources of income. And gig work has become a significant piece of the U.S. economy. But are these jobs even being seen by the people making economic policy?

Research by Boston Fed economist Mary Burke indicates gig workers are being badly undercounted. And that means policymakers aren’t getting a true picture of the labor markets.


I think the most important thing about it is just understanding how people are getting by, what they're doing, what the labor market is giving them and what it's not giving them.


That’s next time, on Six Hundred Atlantic.


Thanks for listening to Season 6 of Six Hundred Atlantic. You can find interviews and our first five seasons and subscribe to our mailing list at bostonfed.org/six-hundred-atlantic. And we'd love it if you would rate, review, share, and subscribe to Six Hundred Atlantic on your favorite podcast app.

The producers would like to thank our contributors for their time and insights. They are Stefania Albanesi, Wendy Ayanbeku, Mary Burke, Chris Foote, Jess Little, and Betsey Stevenson.

This has been “Rethinking Full Employment,” the sixth season of the Boston Fed’s Six Hundred Atlantic podcast.