Recession may have done lasting damage to women in workplace

Earnings may be affected if economic penalty for taking time out of work persists

While output per head is today higher than before the crisis, total employment is still well below its peak. The recession’s aftershock is experienced by those who are still out of work.

The recent economic crisis moved Ireland from a position of near full employment at the beginning of 2008 to an unemployment rate of 15 per cent in 2011.

The effects of this shock were felt quite unevenly across the population. Men’s employment fell by almost 20 per cent while female employment fell by half that. Building was a major casualty and, with its predominantly male workforce, this led to a higher unemployment rate for men than for women: male unemployment peaked at more than 18 per cent whereas female unemployment peaked at 11.5 per cent.

In 2012, when the economy began to pick up and building showed, some recovery, male employment grew more rapidly than female employment. However, over the past year, this position has reversed as women’s employment has grown by 3.2 per cent versus 1.8 per cent for men.


Longer-term trends

The differential effect of the recession on male and female employment has been superimposed on longer-term trends in the labour market behaviour of women. Over the past 40 years, female labour force participation has continued to grow; as we left behind the culture of the marriage bar, families became smaller.

Women generally have a higher level of educational attainment than men and, if anything, this gap has increased over time. Today the Central Statistics Office reports that 40 per cent of women aged 15-64 have a third-level or equivalent qualification compared to 32 per cent of men.

Throughout the crisis years, employment of people with good qualifications continued to grow. The composition of work continued to shift during the recession years towards more professional and managerial occupations. In 2007, 30 per cent of those in employment were classified as managers, professionals or associated professionals. Today the proportion is more than 38 per cent.

The fall in employment in the recession was concentrated among those with low levels of education. Women’s education levels helped to insulate them better than men over that period. Today, women constitute just under half of the professional and managerial workforce, a proportion that has risen slightly since 2007.

Men and women have different occupational profiles, but that has narrowed since 2007 and the onset of the recession. In those occupations where women were overrepresented in 2007, their share has fallen, whereas in jobs where they were underrepresented, their share has risen.

While equality for women has improved in terms of employment rates and the kind of jobs they have, women still suffer a significant disadvantage in terms of earnings. This is reflected in a heavy penalty for time spent out of the labour force, for example when children are young. We don’t have studies yet to examine how this penalty has been affected by the economic crisis.

A consequence of the recession was that not only did unemployment rise but workforce participation also fell significantly, for both men and women.

An important reason for the decline in men’s labour force participation was that a higher proportion of boys chose to stay on in school to complete their Leaving Cert and go on to third-level education. This is a very desirable side-effect of the recession; the temptation to leave school early and take a relatively well-paid unskilled job disappeared.

Labour participation

The pattern for women has been a bit different. Over the course of the recession, the labour-force participation of women over 35 continued to rise, and to rise strongly for the over-55s. Labour-force participation fell, however, for younger women, including those with high levels of education.

One possible explanation could be that the economics of working deteriorated over this time for those women with young children. The economic adjustment saw incomes fall, particularly in public-sector occupations, which are strongly female, such as teaching, nursing and other care occupations. After-tax incomes fell even further as the tax burden rose to bring the public finances back towards equilibrium. The cost of childcare, however, did not go down. This would have affected whether more mothers opted to stay home for longer to care for children.

This reduced labour-force participation by women may have a long-term impact on their earnings if the economic penalty for taking time out of work persists. As a result, the after-effects of reduced labour-force participation by women may be felt for a long time to come.