The gendered recession

Yesterday's LFS numbers were better than a kick in the head with a frozen boot: just under one-third of the losses inflicted by the recession on the labour market have been recovered.

But there's something else that happened in the January release. Many have already noted that employment losses among men were more severe than for women. This pattern is now extending to the recovery.

Firstly, here are the updated graphs comparing employment and hours worked in the last three recessions. Of the jobs lost during the recession, 33% have come back:

The hours worked series is pretty choppy (the data are for a reference week during the month), so I've been using three-month moving averages:

About 30% of the lost hours have come back.

The recovery seems to be well under way, except there's one thing that doesn't show up in the totals. Here's a graph of employment losses by gender:

As far as women are concerned, not only is the recession over, so is the recovery: female employment is now above its pre-recession peak. But the recovery in male employment hasn't even started: the number of employed men is still bumping along the trough established last March.

Speculation as to what this all means is welcomed in the comments.

Update: In the comments, Frances notes that this happened in other recessions as well, and that there are long-run trends in female labour market participation at work as well. Here is a graph of male and female employment rates since 1976 to illustrate these points:

 
 

Comments

[Bruce]

It would be interesting to see if the disparity in wages paid to each group is a siginificant factor when business hire back people to replace the losses made nessescary form the recession.

[Kosta]

I'll echo Bruce's comment and suggest that since women on average get paid less, they're more likely to find work as the economy starts to replace jobs lost.

But I think there's another factor that might be playing a role. In many households, women have gone back to work as the men have either lost their job, or had their hours cut back. I have heard more than one anecdotal story here in Calgary where previously stay-at-home mothers have found jobs after their engineer husbands have lost their or became underemployed.

On that note, many women may have taken part time work to supplement their household income. I'm not entirely sure how the unemployment rate treats part-time employed, but it might be informative to look at hours worked by gender.

[Just visiting from macleans]

Well, we know that the ration of females to males entering university has been increasing over the past decade, to the point where females have a comfortable lead. I pointed to this elsewhere before, but I'll quote again:

In an interview published Oct. 21, [University of Alberta] president Indira Samarasekera said she was concerned by Statistics Canada numbers that indicate women make up 58% of the student population at Canadian universities.

She went on to say a major worry is that 20 years from now “we will not have the benefit of enough male talent at the heads of companies and elsewhere.”

She also said she will be an “advocate” for young white men because, as a woman who is a visible minority, she “can be.”

http://www.edmontonsun.com/news/edmonton/2009/11/02/11611186.html

So, if the resource boom of the past decade has drawn heavily from the unskilled younger males, and investment is still down at this stage of the recovery, or hasn't yet fully recovered, where do these highly paid individuals go? They'd be the first to get dropped, and last to be rehired. Doubtful they'd take a service job, or have the skills req'd for white collar positions in other industries.

My thin slice of the answer.

[Frances Woolley]

Some industries and occupations are female-dominated: health care, education, finance and administration, certain types of sales. Others are male dominated: trades and construction, transport, high-end sales (e.g. cars, appliances), resource extraction etc. The female dominated industries are ones that are not tremendously cyclical - you still need health care even if the economy is going down the tubes. The male sectors are more cyclical - in construction/trades or high end sales you can make loads of money when the economy is booming and nothing when the economy is flat.

Before we shed a lot of tears over a 'he-cession' let's take a look at the entire cycle and see whether or not there was a 'he-boom'.

My bet: over the next five years, as governments try to balance their budgets, we'll see stagnant or declining real wages in education, health care, and all the other female-dominated sectors - and there will be absolutely no attention paid to this at all.

Marie Drolet at Statistics Canada has done some interesting work recently on the gender wage gap across cohorts. Basically the gender earnings gap that a generation experiences is determined, to a large part, by choices made - and opportunities -- in that generation's first years in the labour market. So right now we're seeing big rises in female wage relative to male wages among people in their 50s and 60s. This is because the Mary Tyler Moore generation of women who entered the labour market in the 1960s stay-at-home moms who never enjoyed high earnings within that age group. But we're reaching the limits of this - especially as the daughters of the 1980s SuperMoms say "why should I work that hard? I think I'll rebel and stay home instead of having a career."

And this gets us back to the last discussion. What happens in terms of the "dependency ratio" if, when real wages of younger workers decrease, women choose to stay at home - as Kostas points out in his comment?

On JVfM's comment- Steve, how about a blog post on why boys are failing at school? Or has this been done to death?

[Frances Woolley]

Sorry, bad editing, it should say: So right now we're seeing big rises in female wage relative to male wages among people in their 50s and 60s. This is because the Mary Tyler Moore generation of women who entered the labour market in the 1970s are replacing the 1960s stay-at-home moms who never enjoyed high earnings within that age group.

[Stephen Gordon]

Thanks Frances; one of the reasons I held off on trying to come up with an explanation was that I was hoping you'd do it for me. I've put up with a graph of employment rates by sex over time, to illustrate both points.

One thing about the male employment rates is the cyclical pattern in the secular decline: employment rates fall rapidly during recessions, and never make it back up to their pre-recession levels. OTOH, recessions are temporary blips in the upward trend for women.

I suppose we're going to see that trend level off soon now that the Mary Tyler Moore generation is retiring.

[Don Lloyd]

If, as seems likely, men are more likely to be employed in direct labor positions, where the cost of their employment is a marginal cost of production, then it would seem to make sense that male employment would be more affected as firms need to reduce their production capacity as the demand for their products falls. It seems likely that a larger percentage of women's jobs are not so closely tied to production output quantities. Also, the women's jobs that are direct labor are more likely to involve part time work and piecework, probably more weakly covered by the reported statistics.

Regards, Don

[Nick Rowe]

Stephen: those employment rates, in the last figure, are for people 15 years and over, right?

I was wondering why the male employment rate had been on a secular decline (where did they all go? what are they doing instead?). But it might just be a demographic shift (a higher percentage of men are over 65 than in the past). Plus more are in post-secondary education than in the past?

[Nick Rowe]

To re-phrase Don's hypothesis: men are the variable input; women the fixed input (overhead) in each industry.

Let me put forward an alternative hypothesis: men are employed in cyclical industries (construction, manufacturing, etc.); women are employed in non-cyclical industries (government, health, education, etc.).

[Nick Rowe]

Ooops! I see Frances has already put forward that hypothesis!

[Brian]

I was also wondering about the decline in male employment. I don't believe there are that many more stay at home fathers. It is more likely the statistics aren't capturing all the self-employed. I've noticed a decades long shift towards under the table type jobs, all the way from home renovations to grow-ops. This may have to do with tax rates including benefits available to single/low earner families.

[Don Lloyd]

Different jobs have different abilities to adjust capacity without layoffs. A standard 40 hour per week job with benefits almost cannot be usefully cut back without layoffs. OTOH, a no benefit, pay per actual hour worked job, can be cut back easily, and won't show up in the job loss numbers.

A two income family is somewhat more likely to have the second income come from a more cash-rich, (duplicate) benefit-poor, job, and this second income is still more likely to be earned by a woman.

Regards, Don

[Frances Woolley]

Nick, in answer to where did the men go:

- some in school, tho the young person in Canada who has just about the lowest probability of going to university is a white male, in part because the white population is more rural and live further from university
- a fair few go onto long term disability, or "early retirement" e.g. CPP disability (QPP has tougher screening so less there)
- some are in parental basements and working intermittently.
- Some may be on EI holidays. Employment insurance creates incentives for employees and employers to collude to create employment contracts that include just enough work to qualify for EI.. E.g. instead of having a combined landscape business + snow clearance operation, EI makes it attractive to have a landscape business and lay people off in the winter, and a snow plow business and lay people off in the summer. There's limits to how much you can do this, but it might make a difference on the margin.
- marijuana is BC's largest cash crop and a major employer. How do people running grow ops reply to the labour force survey? What about people working for cash in the underground economy? All robust sectors!

[Jim Rootham]

If you had a long term reduction in a bias against hiring women, wouldn't the employment graph look like that?

As in, recession hits, you go "she's the better worker, lay him off".

Since she was hired in a period of greater bias, this is likely to be true.

Another possible effect.

[Kosta]

Regarding the secular decline in male employment rates, the trend appears to be similar in the U.S. Brad DeLong has a chart
http://delong.typepad.com/sdj/2010/02/something-is-going-wrong.html

[KRZ]

My best guess would be that the reason we haven't seen a pick up in male employment stems from the fact that the goods sector, which bore the brunt of this recession, has yet to show a significant rebound. I don't know for sure, but I think men tend to dominate this area (especially manufacturing) compared to women.

[Account Deleted]

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