One of the biz show pundits made an off-hand remark that he thought much of the recent decline in labor force participation rates was at least partially traceable to women dropping out of the workforce because of the high cost of childcare.
Plausible explanation that piqued my trust but verify interest, so I did a little digging.
Let’s start with the big picture : The total labor force participation rate (LFPR).
Some takeaways ….
Note that the history breaks into roughly 3 distinct eras.
From 1965 (as far back as I looked) until about 1990, the LFPR increased by about 8 percentage … almost a straight line, trending up.
Then, coincident to the 1990 recession, the LFPR essentially flat-lined with some bouncing around between 66% and 67%.
Since the 2008 financial crisis and the LFPR has dropped around 4 percentage points … not quite half of the 1965 to 1990 gain.
Splitting the chart by gender is where things start to get interesting.
Surprise to me, LFPR among men (chart below) has been in a steady decline way back to 1950 … since then, it has dropped about 15 percentage points.
LFPR among women (chart below) nearly doubled from 1950 to around 1997 … a straight line to a peak of just over 60%.
Then, the rate flat-lined until 2008 … and has been trending down since then … maybe because of childcare costs … maybe because of other factors … your guess is as good as mine.
Putting things in a global context, women’s LFPR in the U.S. ranks near the bottom of the list of highly developed countries …. and has declined during a period that it has increased in most other highly developed nations.
Technical note: The age populations are slightly different in the chart below, so the LFPRs are on a slightly different scale.
Many pundits attribute the higher rate in other countries to more flexible time-off policies and government subsidized childcare.
But, it’s not that simple.
To be continued …