Weak Labor Market--Not Motherhood--Explains Declining Women's Labor Force Participation

Recent media coverage presents a belief that women, especially highly educated women, are increasingly likely to stop working when they have children. However, a new report, from the Center for Economic and Policy Research argues that no evidence supports the notion that an opting-out revolution is under way. (See Heather Boushey, Center for Economic Policy and Research, Are Women Opting Out? Debunking the Myth (2005).). In fact, the economic data demonstrate that most women who have left the workforce in recent years have done so as a result of the high job losses related to the recession of the early 2000s.

Researchers have begun to measure the impact, commonly referred to as the “child penalty,” of having children on women’s labor force participation. From 1984 to 2004, the child penalty for women in this age group fell from 20.7 percent in 1984 to 9.9 percent in 2000 and to 8.2 percent in 2004. The steady decline in the child penalty shows that the presence of children alone has had little effect on women’s labor force participation rate, including those of highly educated, older, and first-time mothers. For women in their 30s, the child penalty has fallen by nearly two-thirds, from 18.2 percent in 1984 to 7.9 percent in 2000 and to 7 percent in 2004.

Both the media coverage of the “opt-out” myth and the report from the Center for Economic and Policy Research base their arguments on data retrieved from nationally representative samples. However, the center argues that the data used to support the existence of the “opt-out” revolution is faulty. The data compare women’s labor force participation rate, women’s demographic traits, and cyclical changes in the labor market all together without controlling any of these factors. If the effects of children on women’s labor force participation rate are not isolated, the faulty conclusion is that children alone affect women’s decision to leave the labor market. However, when both demographic traits of women and the overall decline of the labor market are controlled, the child penalty is seen to have fallen consistently over the last two decades (down to 8.2 percent in 2004). Women are leaving the labor force, but attributing this solely to the presence of children is not accurate.

The report also highlights the fact that less educated mothers are more likely to have lower labor force participation rates than highly educated ones. Highly educated mothers aged 25–44 had the lowest child penalty at 1.3 percent, whereas mothers with less than a high school degree had the highest child penalty at 21.7 percent.

Those women who are highly educated and earning a higher income compared to most mothers are 91.2 percent more likely to have a partner with a high income as well. Despite these numbers, a majority of mothers aged 25–44 still work when they have children. The data when controlled further demonstrate mothers’ participation in the labor force: 73.2 percent of highly educated women in their 30s with a young child at home; 80 percent of women with a graduate degree and with a child under 18; and 60.2 percent of women with a high school degree and with a child at home.

The data demonstrate that the recession in the early 2000s decreased the labor participation of all women with and without children, particularly young women.

Even in this time of economic recovery, the employment rate as of October 2005 was down 1.8 percent from its cyclical peak in 2000. The effect of higher job losses when all factors are controlled show that women were overall less likely to be in the labor force in 2004, compared to 2000 (3.2 percent versus 1.1 percent).

Overemphasizing the women’s choice to leave the labor force based solely on their children overshadows the negative effects that the recession placed on women’s labor supply.

The report can be found at www.cepr.net/publications/opt_out_2005_11.pdf.

Volume 9, No. 9
December 14, 2005

Funded in part by generous grants from the Chicago Foundation for Women and the Jo & Art Moore Family Fund.

WomanView is published by the Women's Law & Policy Project of the Sargent Shriver National Center on Poverty Law. To subscribe or make a donation, click here. For more information, contact Wendy Pollack at 312.263.3830 ext. 238. Tina Hernandez Lasquety wrote this article.