Press Release: The Coronavirus Crisis and Its Impact on Women in the Labor Market: Permanent Damage or a Short-Term Setback with Long-Term Potential?

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With the outbreak of the coronavirus and the shutdown of the economy, many workers were laid off or put on unpaid leave. In May, with the reopening of the economy, about 200,000 employees have returned to their workplace, but hundreds of thousands are still receiving unemployment benefits and a high share may never return to their former employer.

A new study by Taub Center researcher Liora Bowers looks at the impact of the crisis from a gender perspective, and shows that the coronavirus and the shutdown of the economy resulted in higher rates of unemployment among women than among men. Although women make up just under 50% of employees in the economy, they accounted for 56% of unemployment claims. This gender disparity is mainly seen in the Jewish sector – with Haredi women experiencing particularly high job losses. This result is likely to harm the progress made in women’s employment rates and wages in Israel. Policy makers must ensure that the unemployment period will only be temporary for as many workers as possible so that they do not withdraw from the labor market.

Before the outbreak of the coronavirus, Israeli women worked at higher rates than the average in the OECD (74% versus 66%) and had more children (an average of 3.1 children per woman). In the last decade, there was a slight decrease in the hourly gender wage gap (from more than 17% in 2008 to less than 16% in 2017). In addition, while a third of women worked part-time in 2018, among men, this figure was only 13% (and even among those who work full-time, women work on average 10% less than men).

Between March 1 and May 10 of this year, about 875,000 unemployment claims were filed by workers ages 20-67; 487,000 (56%) of these were filed by women. Young women were particularly hard hit by the crisis – 60.5% of women ages 20-24 versus 39.5% of men of the same age. This seems to be a global phenomenon, with studies by the Pew Research Center and NBER suggesting that more women in the U.S. will have lost jobs because the industries they tend to work in have been harder hit.

The Taub Center study finds that in Israel, across all industries (except for real estate), the share of women filing unemployment claims was higher than their share of positions in the industry. For example, 83% of unemployment claims in the health field were filed by women, while their employment share in the industry is 76%; and in the information and communications industry, 54% of claims were filed by women while their employment share in the industry is only 41%. It thus seems that in Israel there is little connection between the share of women losing their jobs in the crisis and women’s tendency to work in vulnerable sectors of the economy.

Another explanation is that the weakest workers were harmed the most by the crisis. Women are more likely to work fewer hours, hold part-time positions, be employed in less senior positions, earn less and have more difficulty accruing tenure as a result of periods of maternity leave. All these factors heighten the likelihood of losing one’s job or being sent home on unpaid leave.

Among working parents, women average 23 weekly work hours while men work 36 hours, and in most households, women are the secondary wage earners. As schools and daycares were closed, the logical solution for many families was to sacrifice the woman’s employment to take care of their children. About 46% of unemployment claims were by households with at least one child under age 18, with 18% having a child under 2 years old at home.

Single mothers have been particularly harmed by this situation. Fears of a second wave of coronavirus may prevent many from returning to employment. With the opening of the economy and the return of some workers to employment, it is estimated that the unemployment rate will stand at around 10% at the end of 2020, with at least 20% of the newly unemployed not returning to their previous place of employment.

Still, alongside these dismal predictions, some long-term opportunities for women may emerge. The quick adoption of teleworking is likely to revolutionize the labor market, allowing more flexibility in scheduling as well as lessening the need for a physical presence in the workplace. In a survey conducted by the Central Bureau of Statistics at the end of April, it was found that 61% of high-tech workers and 46% of workers in the finance and insurance industry working the day of the survey were working from home, versus 15% or fewer in other industries.

These work methods are likely to draw women to these higher paying fields of work. A third of high-tech companies expressed interest in widening the use of teleworking even after the crisis passes. The finance industry, long identified as a significant remaining source of gender wage gaps, expressed less enthusiasm about continuing telework – and indeed a CBS survey in early June showed a steep drop with only 10% of finance workers working from home on the day of the survey.

An additional factor that is likely to impact and narrow gender inequity is the exposure of more men to the routine of childcare as many of them shifted to working from home during the shutdown. In 2018, in dual-working households, women spent an average of about 43 weekly hours on childcare and household tasks, while men spent only about 27.

However, initial studies in Israel and elsewhere show that men are spending more time on childcare during the crisis, both in general and particularly in cases where the man was laid off or on unpaid leave. In households where women are essential workers (such as doctors), some men became the primary caregivers. These experiences – as seen in previous studies on countries that have policies granting paternity leave also for fathers – may lead to long-term changes in the gender norms around childcare and household tasks.

“Although most of the newly unemployed were placed on unpaid leave and not laid off, it is unclear how many of them will be returning to their previous places of employment. There is a fear that the crisis will disproportionately harm women’s employment rates and increase gender wage gaps, and ultimately affect women’s pension savings and future earning power. Research has shown that workers who lose their jobs during economic downturns experience a large and continued decrease in wages.

It also appears that single mothers will be major losers. If employers in high wage industries such as high tech and finance will enable continued flexibility in work hours and teleworking after this crisis ends, I believe that more women will turn to these industries; and in the end, there is a possibility that gender wage gaps might even narrow,” says researcher Liora Bowers.

“Currently, with programs being enacted to incentivize employers to return workers from unpaid leave, it is important to examine policies from a gender perspective, since women lost their jobs disproportionately. At the same time, it is important to build training programs to improve employment skills looking towards the future for those workers who are unable to return to their previous places of employment. Now is the time to present a strategy for schools and daycare in the event of a second wave or a similar future crisis, and to encourage employers to embrace flexibility and teleworking practices” says Prof. Avi Weiss, President of the Taub Center.

The Taub Center for Social Policy Studies in Israel is an independent, non-partisan socioeconomic research institute. The Center provides decision makers and the public with research and findings on some of the most critical issues facing Israel in the areas of education, health, welfare, labor markets and economic policy in order to impact the decision-making process in Israel and to advance the well-being of all Israelis.

For details, or to arrange an interview, please contact Anat Sella-Koren, Director of Marketing, Communications and Government Relations at the Taub Center for Social Policy Studies in Israel: 050-690-9749.