Developing a research agenda on racial and gender equity in the pandemic-era U.S. labor market

This summation of a joint roundtable discussion was written in partnership with The Century Foundation.

Now, more than 2 years after the start of the COVID-19 pandemic in the United States, workers, academics, and policymakers alike are still figuring out its full implications on the U.S. labor market. Going forward, understanding what changes occurred, which ones are temporary and which are permanent, and what the labor market will look like in the years ahead will be of great importance for the well-being of U.S. families and the broader U.S. economy.

Dubbed by many observers not as a recession but as a “she-cession,” the COVID-19 pandemic’s effects on U.S. society and the economy—including school closures, child care disruptions, shifting caregiving responsibilities, and massive layoffs in the service and hospitality sectors, among others—have been disproportionately borne by women. Intersecting oppressions, including structural and ongoing racism, mean the impacts are felt even more by Black, Latina, and immigrant women. The personal effects of these challenges have been clear from the start, but the ways in which they translate to the labor market, families’ economic security, and the economic recovery are areas for further study.

A new working paper by Harvard University’s Claudia Goldin, for example, finds that, contrary to some expectations, women overall did not significantly exit the labor force or reduce their work relative to men during the COVID-19 pandemic. The COVID-19 recession was a “she-cession,” Goldin finds, not because women fared much worse than men in aggregate employment or labor force participation, but because women were more affected relative to past recessions, which traditionally spared women-led sectors of the U.S. economy to a greater degree. While many women remained in the workforce over the past 2 years, the added stress of the pandemic, caregiving responsibilities, household duties, and remote schooling—on top of regular employment—disproportionately took a toll on women’s well-being and mental health.

Of course, aggregate data do not speak to the varied labor market experiences of working women across the United States. Workers of color, parents and other caregivers, workers with lower educational attainment, as well as those workers relying on part-time employment and employed in certain occupations faced worse labor market outcomes than the aggregate or averages suggest. The mechanisms that contributed to these disparities require continued study both to better understand them and to help craft an appropriate policy response.

To provide further clarity on the U.S. labor market for women in the pandemic era, The Century Foundation and the Washington Center for Equitable Growth co-hosted the Women’s Racial and Economic Justice Roundtable, bringing together more than 40 leading policy experts and academics to share data, identify key research questions, and discuss promising strategies for future studies. This column summarizes the key themes and research questions identified at this roundtable, as well as key recommendations for researchers that came out of the event.

How caregiving responsibilities impact labor market decisions and well-being for women and their families

Throughout the COVID-19 pandemic, preexisting fault lines in the U.S. child care market—long plagued by a lack of public investment, leading to high prices, limited access, and low wages—fully ruptured. In the early months of the crisis, the pandemic-induced lockdowns and stay-at-home orders temporarily shuttered some care providers to slow the initial spread of the virus; some never reopened. As the pandemic dragged on, families were forced to make difficult choices around their child care needs amid public health and safety concerns.

Today, employment in the child care sector remains roughly 12 percent below pre-pandemic levels, exacerbating the preexisting capacity crunch for families seeking child care.

Care challenges amid the pandemic were not restricted to parents with children. Half of adults caring for a parent or other loved ones faced disruptions in their normal caregiving arrangements due to the pandemic. Women and caregivers of color were more likely to face such disruptions, which were associated with higher levels of mental health challenges and job losses.

Despite these well-documented challenges, further research is needed on how these care responsibilities impacted women’s labor force participation, including work hours, job quality, and overall economic stability, and how that impact varied by racial demographics, family structure, education level, and other characteristics. Roundtable participants suggested that these insights could best be provided by longitudinal or long-term research on this topic.

Research by roundtable participant Misty Heggeness and others at the Minneapolis Federal Reserve, for example, documents how mothers of school-aged children fared similarly to fathers at the start of the pandemic—tenuously balancing work, remote schooling, and child care. But as the pandemic dragged on, mothers who worked remotely were less likely to be actively working, compared to fathers. Such trends would be invisible with research restricted to shorter time-horizons.

Insufficient data and imprecise research on women of color obscures the current state of the labor market

As with past economic downturns, the COVID-19 recession was particularly harmful for workers of color, due to a combination of sector-specific job losses in leisure and hospitality early in the pandemic, preexisting inequalities that make economic shocks more difficult for people of color to weather, and systemically racist practices that impede access to income support programs.

Two years after the end of the COVID-19 recession, the seasonally adjusted unemployment rates, as of April 2022, for Black women of 5 percent and Latina women (3.8 percent) were well above the 2.8 percent rate for White women.

Other data points suggest a more complicated story—at least initially. Black women, and particularly Black mothers, for example, historically have had a consistently higher labor force participation rate than White mothers. Part of the reason for this difference is clear: Policy choices, current laws, and related factors ensure that Black women have needed to work as a matter of economic necessity. A persistent racial wealth gap born from the legacy of slavery and systemic racism, coupled with the fact that two-thirds of Black mothers are the sole or primary breadwinner of their households, compared to only one-third of White mothers, yield greater paid labor among Black women.

Yet despite having an overall higher labor force participation rate, Black women’s labor force participation is down 2.2 percentage points from February 2020, compared to 1.2 percentage points for White women. (See Figure 1.)

Figure 1

A lack of data on workers of color may be obscuring any remaining challenges in the pandemic labor market that would illuminate people’s lived experiences. Such data limitations include the mismatch of datasets that look at relevant variables and a lack of longitudinal data that would follow the same individuals over time to understand how they have fared in the crisis brought on by the pandemic. Roundtable participants stressed the importance of the careful selection of employment outcomes, longitudinal research, and nontraditional data sources to overcome gaps in data for policymakers and researchers to accurately understand the nuances of the labor market experiences of women of color.

In April 2022, for example, employment for Hispanic or Latina women ages 20 and up was just slightly higher than its pre-pandemic level in absolute terms—11,839,000 employed women, compared to 11,831,000 in February 2020—but this number obscures the relative within-group experience of these women in the pandemic labor market. While higher total employment is certainly a boon for the U.S. economy, these figures do not consider the population growth that occurred during the pandemic, and this statistic overstates the job recovery for Hispanic women and Latinas. The employment-to-population ratio—the ratio of the current civilian labor force against the total working-age population—for this group of women workers, for instance, has fallen from 59.1 percent to 56.8 percent over that same period.

Likewise, the lack of accessible longitudinal data that include details on care responsibilities and labor market outcomes makes it difficult to conduct research to understand how the care shock of the early pandemic subsequently shaped people’s employment.

Finally, data on racial and ethnic groups that have relatively smaller populations in the United States, including American Indians and Alaska Natives, are not always collected consistently or in large enough samples for scholars to conduct empirical research that reflects population levels due to lack of statistical significance. The monthly Employment Situation Summary published by the U.S. Bureau of Labor Statistics only recently began publishing data that includes American Indians and Alaska Natives, but these data are not seasonally adjusted due to small sample sizes, so it is difficult to interpret month-over-month variation.

Do declines in ‘pink collar’ jobs stem from lower worker supply or employer demand?

The unique nature of the COVID-19 recession resulted in atypical patterns of job loss, compared to prior recessions. Industries that were once more recession-resistant couldn’t avoid the economic challenges arising from reduced public demand for in-person services, temporary business closures, and the swift and deep recession.

During the Great Recession of 2007–2009, for example, construction and durable goods manufacturing—two sectors employing primarily men—suffered the worst losses amid the housing market crisis. In contrast, during the COVID-19 recession, the leisure and hospitality, health and educational services, and retail sectors that more often employ women, also known as “pink collar” jobs, faced the deepest declines.

Not all of these jobs have returned. Even though care needs within families do not follow business cycles, many care-sector jobs remain below their pre-pandemic levels. Some of these industries employing primarily women, such as nursing care, are still losing jobs, while others, such as child care, are well below their pre-pandemic levels—even as the rest of the labor market is nearing a full recovery. (See Figure 2.)

Figure 2

Roundtable participants discussed some reasons why this might be the case. A common public narrative is that these job openings and losses stem from lower labor supply, or a “worker shortage,” in which workers are unwilling to return to jobs in these sectors due to issues of low pay, poor job quality, or other opportunities. At the roundtable, however, participants explored a different explanation: Perhaps these sectors have reduced their labor demand in ways economists have not observed in past recessions.

In previous recessions, heavily impacted industries often experienced a realignment of their labor supply needs as low-productivity firms exited the market, business practices and processes were reconfigured to reduce labor costs, and employees exited the labor force or delayed entry to the labor market. Among those industries heavily burdened by the Great Recession, for example, manufacturing never returned to pre-2007 employment levels, and construction had only just recovered when the COVID-19 recession hit.

Meanwhile, the industries most impacted by the COVID-19 recession have faced no such long-term depression from past recessions but face unique challenges in their rebound, including the persistent public health crisis and inherent market failures that threaten their stability.

While job openings in heavily impacted sectors are currently high, this trend does not rule out the potential that the pandemic caused a shift in labor demand. Indeed, roundtable participants predicted more demand-driven reductions in sectors that employ more women than public discourse suggests and stressed the need for closer investigation of this topic.

Attendees also recommended that researchers employ empirical techniques such as probability models on the likelihood of working and mixed-methods research that includes both in-depth, qualitative surveys and broad population surveys as potential means for exploring this topic and understanding the supply- and demand-side factors that shape current labor market outcomes.

The fiscal policy response to the COVID-19 pandemic may be exacerbating racial and gender gaps in the labor market

The sudden onset of the COVID-19 pandemic in 2020 required a quick and robust policy response. While this policy response surely blunted the impact of the pandemic on the U.S. economy, preexisting deficiencies in income support programs and unintended flaws in new pandemic-specific programs may have resulted in an unequal recovery for women, and particularly women of color.

Eligibility requirements and application hurdles resulted in lower rates of access and recipiency of Unemployment Insurance for women relative to men and Black workers relative to White workers. Meanwhile, small businesses, such as family child care homes and Black- and Hispanic-owned businesses, faced significant hurdles accessing the Paycheck Protection Program yet were disproportionately impacted by the pandemic.

Despite these issues, roundtable participants were quick to point out that many programs were successful in supporting public health and the economy throughout the pandemic in the United States. Federally funded emergency paid leave helped flatten the curve of COVID-19 cases, and the Child Tax Credit significantly reduced childhood poverty and alleviated food insecurity. And flexible funding from the American Rescue Plan helped pull the child care industry back from the brink of collapse and support more families in need of home- and community-based services for their older and disabled loved ones.

Still, the future of the federal policy response to the COVID-19 recession and longer-term social policy investments are uncertain. Emergency paid leave and the Child Tax Credit were allowed to expire, along with many other pandemic-era policies that shored up families’ economic security. Funding for child care relief will soon run out as well.

One factor contributing to the unevenness of the government’s policy response is that women have typically been segregated into historically undervalued occupations. While Congress was able to pass the Infrastructure Investment and Jobs Act in 2021, generating resources for industries such as construction and energy that employ more men, legislation that would invest in the economy by building a robust care infrastructure has stalled. These investments in the care economy, including child care and home health, would have benefited women more, while also generating more jobs and growing the economy more than physical infrastructure investments alone. (See Figures 3 and 4.)

Figure 3

Figure 4

Roundtable participants suggested that while much is already known about the policies enacted or expanded during the pandemic, future research could shed light on how these policies impacted specific communities. At the root of many remaining research questions is the issue of data, including data on the distributional effects of the government’s fiscal policy response, the utilization of emergency paid leave, and the disbursement of funding under the Coronavirus Aid, Relief, and Economic Security, or CARES, Act and the American Rescue Plan Act.

Beyond that, roundtable attendees agreed that researchers should highlight the experiences of those who are disproportionately impacted by the policy responses but largely removed from policymaking processes, including, but not limited to, women of color, parents with young children, and immigrant workers.

Conclusion

The economic story of the COVID-19 pandemic is still being written, but the health of the U.S. economy and economic equity for women and workers of color requires a nuanced understanding of the U.S. labor market today. Several things, however, are clear. The COVID-19 recession impacted women, and particularly women of color, to a greater degree than past recessions. Several industries that primarily employ women are still facing the economic fallout of the pandemic more than 2 years later. And the unique nature of the pandemic exacerbated caregiving challenges that primarily fall on women.

Still, important questions remain. How are child care and other caregiving duties translating to women’s labor market outcomes and personal well-being, including mental health? How much of the lingering reductions in employment stem from labor demand as opposed to labor supply? What changes to the labor market are permanent, and which will revert to their pre-pandemic state? What are the short- and long-term impacts of the federal government’s uneven fiscal policy response?

Participants in the recent roundtable co-hosted by the Washington Center for Equitable Growth and The Century Foundation provided several key recommendations for researchers as they seek to answer these questions, including:

• Conducting longitudinal and long-term research
• Cultivating nontraditional data sources to overcome gaps in data
• Using careful selection of data and measures to understand the nuances of the labor market experiences of women of color
• Employing empirical techniques, such as probability models and mixed-methods research, to better understand factors that shape our current labor market outcomes
• Engaging in research that highlights the experience of women disproportionately impacted by public policies but largely locked out of the policymaking process

By convening leading academics, policy experts, and advocates for the Women’s Racial and Economic Justice Roundtable, Equitable Growth and The Century Foundation are helping to refine the research agenda on racial and gender equity in the pandemic-era labor market and stimulate new research that will inform equitable policy solutions. Such evidence-backed policies are essential to the recovery from the COVID-19 recession and to position U.S. workers and families to share in sustainable, broad-based economic growth.