DALLAS – Has a half-century movement driving more women into the work force come to an end?
After consistently entering the labor market in greater numbers, women have dropped out of the work force in recent years at a surprising pace. The trend has intrigued economists and historians – and in some cases, worried them about the nation’s economic growth.
But the changes may simply mark an interesting moment in labor history rather than a source of economic distress, according to a report released recently by the Federal Reserve Bank of Dallas.
Fed researchers found that the women who are dropping out have been mostly educated, married with children and in higher-income families – rather than part of more vulnerable socioeconomic groups.
“It seems to be more of a choice than a consequence for people getting forced out of the labor market,” said Pia Orrenius, a senior economist at the Dallas Fed.
The trend comes as younger people have dropped out of the work force in larger numbers, often to attend school. Meanwhile, older people have remained in the work force in greater numbers, in response to longer life spans, increasing health care costs and declines in pension plans.
Larger shares of women had entered the work force steadily from the 1950s to the end of the century. Researchers attributed the trend to demographic changes, such as delayed marriages and fewer children, and household technological innovations such as dishwashers and microwave ovens that freed up time for women to work.
But since the start of this decade, the work force participation of women in prime working years – between ages 25 and 54 – has experienced its largest sustained decline since World War II.
By 1999, 76.8 percent of women in that age group were in the work force, up from about 35 percent a half-century earlier.
The drop started in 1999, after tapering off for much of that decade. One explanation could be that women saw less wage growth than before. And the economic boom of the late 1990s probably drew out most of the women who would have entered the work force, Orrenius said.
“We’ve always known that they couldn’t continue forever,” she said. “The boom of late 1990s may have caused the peak to come earlier than it would have otherwise.”
The period may have marked a key moment in history: After half a century of trying to break into the work force, those who wanted to enter could. The drop for women since then followed the overall economic downturn, along with other factors that have been harder for experts to define.
The surprising downturn, though slight, has drawn concerns among some economists that it could weaken the nation’s economy, which generally grows by adding workers or raising productivity.
Immigration could make up for the difference if lawmakers loosened restrictions to take in more workers.
The good news, Orrenius said, is that the current economic recovery appears to have reversed the downward trend. As the overall climate improves, the percent of women in the labor force has increased from 75.1 percent in the first quarter to 75.4 percent today.
During future business cycles, as a group women’s participation may move in the same direction as that of men, Orrenius said. “The amount of economic growth that we’re going to get from labor force participation among women is going to be smaller.”
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