Labor Market Transitions Over the Business Cycle: Gender Differential in the United States from 2001 to 2020

Using matched panel data from the Current Population Survey (CPS) from 2001 to 2020, this article examines the gender differential in monthly labor market transitions across the business cycle in the United States. A Markov transition model is applied to investigate the inflows and outflows of different labor force statuses in response to economic fluctuations. Relative to men, women’s flow into employment rises as the economy worsens, and flow into unemployment and not-in-labor force falls. Cyclical sensitivity is found to be strongest among women with low educational attainment and substantial childcare responsibilities. Tests for structural change brought about by the Great Recession indicate that women experienced a lower probability of leaving the labor force in the post-2007 period relative to men.HIGHLIGHTSExamining gender patterns in cyclical transitions in the US labor market aids our understanding of women’s labor force statuses.Women’s labor market attachment is increasing, thanks to improving gender parity in educational attainment and skill qualifications.Compared to men, women’s flow into employment rises as the economy worsens, and they are less likely to leave the labor force during economic downturns.Women workers serve as a flexible reserve, and their labor market behavior over the cycle depends on the organization of the family.