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

Author

Listed:
  • Alon, Titan

    (University of California, San Diego)

  • Doepke, Matthias

    (London School of Economics)

  • Olmstead-Rumsey, Jane

    (London School of Economics and Political Science)

  • Symons-Hicks, James

    (London School of Economics and Political Science)

  • Tertilt, Michèle

    (University of Mannheim)

Abstract

We study the transmission of macroeconomic shocks in a model of the household sector featuring single and married households, joint labor-supply decisions of women and men, and childcare needs that interact with the availability of remote work. Recessions concentrated among women are deeper and more persistent than those concentrated among men, reflecting weaker within-family insurance and a new empirical finding that women re-enter employment more slowly after job loss. Yet recovery from the pandemic recession, which had a disproportionate impact on working women due to school closures and the sectoral distribution of job losses, was surprisingly 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 offsetting effects on aggregate recession dynamics.

Suggested Citation

  • Alon, Titan & Doepke, Matthias & Olmstead-Rumsey, Jane & Symons-Hicks, James & Tertilt, Michèle, 2026. "This Time It's Different: The Role of Women's Employment in Recessions," IZA Discussion Papers 18830, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18830
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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