Covid and Women’s Labour Force Participation in Canada – Pandemic threatens decades of gains

COVID downturn sees job losses eclipse those of any other recession

Canada has been roiled by a recession unlike any other – one distinguished not just by the overall magnitude of damage it has inflicted on the economy but by the specific, unprecedented blow it has dealt to women. In a matter of months, the COVID 19 pandemic knocked women’s participation in the labour force down from a historic high to its lowest level in over 30 years.

Beyond the strain these job losses have placed on families and individual women – who have borne the brunt of child-rearing responsibilities as schools and daycares close – their impact on Canada’s overall economic growth has been severe. The uneven and slow economic recovery in the second half of the year will leave Canada’s economy 5% smaller than before the crisis. With women’s employment recovering more slowly than men’s, it will likely have a more significant impact on the hit to GDP.

Worryingly, the outsized role women play in the industries hardest hit by this recession, together with ongoing uncertainties about availability of school and childcare in the fall mean this lost ground won’t easily be recovered. As our previous research highlighted, women’s increased participation in the labour market has provided an enormous lift to the economy’s performance. And this year’s recovery likely won’t be enough to restore women’s participation rate to pre-COVID levels – a factor that carries significant economic consequences. It is imperative that this proves a short-term diversion.

Key findings:

• The pandemic has pushed women’s participation in the labour force down to its lowest level in three decades, with 1.5 million women losing their jobs in the first two months of the recession.
• Women’s employment, which is dominant in the sectors hardest hit by the recession, has been slower to rebound as the economy reopens. Despite absorbing 51% of job losses in March and April, women accounted for just 45% of job gains in May and June as economic activity restarted.
• Women are more likely to “fall out” of the workforce. Nearly half of newly unemployed women who lost their jobs between February and May (and one third who lost jobs between February and June) were terminated and did not seek work– putting them at higher risk of long term job-separation and future wage penalties.
• Employment among women with toddlers or school aged children fell 7% between February and May compared to a decline of 4% among fathers of children the same age. Single mothers were even more significantly impacted, with employment among this cohort (with a toddler or school-aged child) down 12% from February to June (compared to a 7% decline among single fathers).
• Women accounted for ~45% of the decline in hours worked over the downturn, yet will only account for ~35% of the recovery.

Chosen excerpts by Job Market Monitor. Read the whole story @ Pandemic Threatens Decades of Women’s Labour Force Gains – RBC Economics