Economic Study Refutes Myth that Women are Opting Out

Weakness in labor market - not motherhood - linked to lower participation rates

 For Immediate Release: November 30, 2005

Contact: Lynn Erskine, 202-293-5380 x115 

Washington, DC: Declining labor force participation rates in women are due to weakness in the labor market -- not mothers "opting out" because of their children -- according to a new study by the Center for Economic and Policy Research. The report, "Are Women Opting Out? Debunking the Myth," by economist Heather Boushey, refutes the common belief that women are increasingly quitting their jobs when they have children.

"Much has been made of the fact that the labor force participation rate of mothers has fallen in recent years, but that's not about motherhood or decisions to stay at home. It's about the lackluster labor market,"said Heather Boushey, author of the study.

The impact of having children in the home on women's labor force participation (the "child penalty") actually fell last year compared to prior years.

The report, which analyzed Current Population Survey's Outgoing Rotation Group data (a Bureau of Labor Statistics survey), found that the child penalty on labor force participation for prime-age women, aged 25 to 44, was 20.7 percentage points in 1984 and has fallen consistently over the last two decades, down to 8.2 percentage points in 2004. This means that in 2004, labor force participation by women in this age group with children at home averaged 8.2 percentage points less than for women without children at home.

The early 2000s recession led to sustained job losses for all women - those with and without children at home - and the labor market only just returned to its 2000 employment level in January 2005, nearly four years after the recession began. During this recession, women experienced their largest employment losses in decades and once this is controlled for, the presence of children at home plays a smaller role in women's labor force participation than it did in previous years, going back to 1984.

The argument has been made that highly-educated, older mothers are increasingly opting out. However, between 2000 and 2004, 30-something mothers with advanced degrees saw no statistically significant change in the effect of children on their labor force participation rates. The child penalty is smallest for this group of mothers and they are more likely to work than other mothers.

To read report summary, click here.