This Time It’s Different: The Role of Women’s Employment in Recessions

We study the transmission of macroeconomic shocks in a model of the household sec tor featuring single and married households, joint labor-supply decisions of women and men, and childcare needs that interact with the availability of remote work. Re cessions concentrated among women are deeper and more persistent than those con centrated among men, reflecting weaker within-family insurance and a new empir ical finding that women re-enter employment more slowly after job loss. Yet recov ery from the pandemic recession, which had a disproportionate impact on working women due to school closures and the sectoral distribution of job losses, was surpris ingly rapid. We show that in our model, the expansion of remote work and shifting caregiving norms after the pandemic raise female labor supply and men’s share of childcare, thereby accounting for the observed recovery. These changes permanently increase female participation and narrow the gender earnings gap, but their effect on future recessions is limited: greater labor force attachment among women weakens the added-worker effect but also accelerates labor market re-entry, leading to offset ting effects on aggregate recession dynamics.