Plunging Employment: Blame Mom?
For Immediate Release: June 2, 2006
Contact: Debi Kar, 202-387-5080
The Center for Economic and Policy Research (CEPR) has released an issue
brief examining the sharp decline in labor force participation that has been a
striking feature of the recent recession and subsequent recovery ahead of
Friday's release of the May employment report.
There has been an extraordinary falloff in the percentage of workers who are
employed. The most recent data shows that the share of the adult population who
hold jobs stands at 62.2 percent. If the employment to population ratio, or EPOP,
was as high today as at its 2000 peak of 64.9 percent, it would correspond to
another 6 million employed workers.
While some analysts have suggested that the decline in labor market
participation is a positive development because it is occurring mostly among
mothers, the data do not support this story.
If a strong labor market led to more mothers staying home, this would have
occurred during the economic boom of the late 1990s. However, the opposite is
true. Mothers' labor force participation grew until the end of the boom, at
which point it began to decline.
Labor force participation among prime age workers (ages 25 to 45), as
measured by the employment to population ratio (EPOP), in the two years prior to
the downturn (1998-1999) shows a sharp decline, for both men and women, and both
for women with and without children. Prime age workers have sharply lower
employment rates in 2003 regardless of their gender and whether they have
children. Given that women--and especially mothers--saw larger increases in
their EPOPs during the late 90s, compared to men, it makes sense that they would
see a larger decline during the downturn.
Examining employment rates and wage growth for people between the ages of 18
and 30 reveals that the EPOP ratio actually dropped more for men than for women.
If the cause of declining labor force participation was mothers who were
dropping out of the work force to concentrate solely on child rearing, then the
drop in labor force participation should have been higher for that age bracket
given that nearly 60 percent of all first births are to mothers aged 18 to 24.
More rapid wage growth for the men remaining in the work force would be an
expected feature of a prosperous economy that is making it easier for women to
stay home with their young children. However, wage growth fell sharply with the
onset of the recession in 2001, falling to an annual rate of just 0.3 percent
for both men and women. Real wages are currently growing less rapidly than in
the boom during the late 90s. Thus it is unlikely that more families are feeling
sufficiently prosperous such that mothers of young children no longer have to
seek paid employment.
The argument that the sharp falloff in labor force participation rates is
attributable to the voluntary decision of mothers to stay home with their young
children is completely contradicted by the data. The falloff in labor force
participation among men is comparable to the falloff among women, and there is
little difference in the decline between women with children and women without
children. Further, slower wage growth for men does not make it easier for women
to give up their jobs.