Tuesday, 14 January 2014

Graph of the week: gender gap in the labour market

In the recovering US labour market, it seems that women have overtaken the men in terms of job gains in the past few years. 

This trend was noticed in the last month's job report where the men gained zero net jobs, attributing the entire net job growth to women (75,000 jobs). Interestingly enough this apparent gender gap trend is characteristic for the entire recovery:
Source: FRED

Why is this? It's actually rather expected - the male-dominated sectors like construction or manufacturing have suffered a huge slump and are recovering slowly, while the women-dominated sectors like health care, retail or the public sector (teachers), have been less sensitive to the business cycle and have recovered more quickly (both can be seen in the graph - the drop in female employment has been less steeper than the drop in male employment, and while both were struggling to recover, by 2013 the women have made up the lost time and regained their pre-crisis employment levels).  

The employment gap is not so much gender-driven as it is sector-driven. This is obvious when looking at the numbers for manufacturing: 

Source: FRED
Not a particularly strong recovery in this sector, is it? Even before the crisis, the downturn was obvious due to the outsourcing trend. The same can be seen for employment in construction, meaning that the private sector job growth has obviously been captured more by women. In addition, looking at the E-P ratio for men, it seems many are still discouraged. However, despite all of this, the real gender gap is still there, as evident from the first graph above. I wouldn't say it was much different than from before the crisis. 

What about the young? The drop in male employment was even more steep than in the general population, which again makes sense, as the young workers were the first to get laid off in construction or manufacturing. The women however seem to have both suffered less and recovered even more robustly. Why didn't young women experience a drop in employment? This can be explained through college enrollment, where the latest trends have pointed out that women not only enter colleges at a higher pace than men, but also that around 60% of grad students were women. 

Source: FRED

This could be the best explanation of why in the age group 20-24 men were more sensitive to the business cycle, working predominantly in the industries that suffered the most, while the women of the same age group were mostly studying at the time. All in all, I believe this is a positive trend as I assume in the long run it will put pressure on closing the gender gap. Which is still very large. 

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