This Time It's Different: The Role of Women's Employment in Recessions

Titan Alon (), Matthias Doepke (), Jane Olmstead-Rumsey (), James Symons-Hicks () and Tertilt, Michèle ()
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Titan Alon: University of California, San Diego
Matthias Doepke: London School of Economics
Jane Olmstead-Rumsey: London School of Economics and Political Science
James Symons-Hicks: London School of Economics and Political Science
Tertilt, Michèle: University of Mannheim

No 18830, IZA Discussion Papers from IZA Network @ LISER

Abstract: We study the transmission of macroeconomic shocks in a model of the household sector featuring single and married households, joint labor-supply decisions of women and men, and childcare needs that interact with the availability of remote work. Recessions concentrated among women are deeper and more persistent than those concentrated among men, reflecting weaker within-family insurance and a new empirical finding that women re-enter employment more slowly after job loss. Yet recovery from the pandemic recession, which had a disproportionate impact on working women due to school closures and the sectoral distribution of job losses, was surprisingly rapid. We show that in our model, the expansion of remote work and shifting caregiving norms after the pandemic raise female labor supply and men's share of childcare, thereby accounting for the observed recovery. These changes permanently increase female participation and narrow the gender earnings gap, but their effect on future recessions is limited: greater labor force attachment among women weakens the added-worker effect but also accelerates labor market re-entry, leading to offsetting effects on aggregate recession dynamics.

Keywords: recessions; business cycle; he-cession; she-cession; pandemic recession; job loss; added worker effect; gender equality; female employment; school closures; childcare; gender wage gap (search for similar items in EconPapers)
JEL-codes: D13 E32 J16 J20 (search for similar items in EconPapers)
Date: 2026-07
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