A Closer Look

American Women Aged 25 to 54 and Career Break- 4.2 million were out of the labor force in 2017

With approximately 4 million baby boomers retiring every year, the unemployment rate down to 4.1%, and a growing economy, the US faces a projected period of increasing labor shortages, especially for experienced workers. Educated women (and men) below retirement age who are not in the labor force represent a source of underutilized talent and skills. Making better use of these workers’ talents has the potential to benefit the individuals themselves, employers, and our overall US economy.

Scope of the Opportunity

Among Americans ages 25-54, the majority of bachelor’s degrees and graduate degrees are now held by women. These highly-educated women are more likely to engage in paid work than women with less education. Nonetheless, among the 25.3 million American women in this age group with bachelor’s degrees or higher in 2017, 4.2 million were out of the labor force. Some of these women are disabled or retired, but the remaining 3.6 million women might be enticed to return to work under the right conditions.

Many factors in addition to education affect individual women’s decisions regarding whether to engage in paid work, including whether she has children (or other family members) to care for, overall household income, and her marital status. Of course, these same factors apply to men. Yet it remains true that having children increases men’s likelihood of labor force participation while decreasing women’s likelihood, even among the college-educated. Thus, among this population, the difficulties associated with re-entering the labor force following a career break affect women disproportionately.

Given rapid changes in technology, laws, regulations, and even software used in many jobs, someone who has been out of the workforce for more than a few months may find that she lacks specific skills and knowledge that are now seen as required for the job she once had. In some fields (e.g., law, accounting, finance, healthcare) where content knowledge changes regularly or that require continuing professional education and recertification, the challenge may be even greater.

Many educated women who do manage to return to employment following a break may end up “under-employed,” in the sense that they are working in a job that is below their skill level or are working fewer hours than they desire. This throws them off track for later promotions. We do not have good data on the size of this group in the US, but surveys in the United Kingdom (UK) indicate 40% of women returning to work in the UK experience “occupational downgrading.” Among working mothers in the UK who are working part-time, 37% would increase the hours they work if they could work more flexibly.

Why Employers and Others Should Care

The non-employment and underemployment of millions of women who are among the most highly educated and skilled Americans represent a significant loss: to them, to the employers who would hire them (and who are finding it difficult to replace skilled baby boomers who are retiring), and to our US economy overall, which is leaving this valuable human capital untapped. Of course, not all college-educated women who are out of the labor force necessarily want to return to paid work. But already many do return, and more might if the conditions were right. For example, if the 290,000 American women with BAs or higher who are currently out of the labor force and say they want to return to work did so, it would add almost $33 billion in productive capacity to the US economy and increase GDP by more than 0.15 percent.4 Providing better “on-ramps” for re-entry into jobs commensurate with their skills and more flexible working conditions following re-entry might encourage greater numbers of highly educated women (and men) to consider returning to work.

Companies should care because, in addition to filling their immediate needs for skilled talent, college-educated women represent their primary source for gender-diverse senior leadership and board positions further down the line. To the extent that women leave the talent pipeline during their early or mid-careers and then find it hard to re-enter at a similar level, it means that there are fewer women with adequate experience in the pool when it comes time to choose senior leadership. Many women seeking to re-enter the work force following a break are in their 40s or 50s, which means that in addition to education, they bring maturity and experience, and are more “settled” (e.g., fewer maternity leaves, spousal job relocations). These women are often very committed to the companies that demonstrate that they value their skills by hiring them.

Chosen excerpts by Job Market Monitor. Read the whole story at Helping Skilled Workers Return to Work following a Career Break | Committee for Economic Development of The Conference Board

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