Report Indicates Employment Rate For Women On The Rise

The employment rate for women has recovered faster following the COVID-19 pandemic than it has for men, thanks to increased levels of higher education and workforce participation, and despite expectations that the economic cost of the pandemic would disproportionately impact women, according to a forthcoming working paper from the University of Pennsylvania.

Penn Wharton Budget Model (PWBM), a nonpartisan, research-based organization, recently published a brief summarizing the forthcoming paper’s findings reviewing the evolution of employment of prime age women – women between ages 25 and 54 – over the last few decades.

According to the brief, there are two long-term trends that have impacted the high employment rate of prime age women: the rising share of women who are college graduates, and a shrinking penalty for college-educated mothers. Despite the many impacts of the pandemic – on schooling, childcare and the workforce – these trends continued to accelerate after 2020, according to the authors.

While employment rates decreased by the same rate for men and women during the pandemic, women recovered much faster: prime age women recovered to February 2020 levels by the beginning of 2023, more than six months before men. And by spring 2023, women’s employment rate hit the highest it had ever been, at 75.3%, according to the report.

To better understand the evolution of women’s employment, the report looked at two key factors: motherhood and education. Women with a college degree are about 15 percent more likely to work than women without a degree, and mothers of young children (under age 10) are about 10 percent less likely to work than women without children, according to the report.

Compared to the pre-pandemic employment peak for women, only non-college educated mothers’ employment rates have fully recovered. Employment rates for college graduates without children and women without a college degree (with or without children) have followed a predictable downturn since the early 2000s.

However, college-educated mothers with young children have seen a different trend: their employment rates have been steadily increasing over the past two decades, rising to nearly 80 percent in 2023, according to the report. Additionally, following the pandemic, college-educated mothers recovered faster than any other education/motherhood group, or any comparable group of men.

One of the significant impacts on women’s employment rates is an increase in educational attainment, according to the report. Over the past 20 years, the number of women with a college degree rose from 30 percent to more than 45 percent and since college graduates are more likely to work, this raised the overall employment rate.

College-educated mothers of young children are also more likely to be employed; the number of degree-holders with a child under 10 who worked rose 10 percent between the early 2000s and 2023. During that same time frame, the number of women who did not work because they had to take care of their family fell by 10 percent.

The report notes that the associations between education and motherhood are not necessarily the causes of the differences in likelihood of working, but highlight that both education and motherhood reflect choices made by women that may reflect preferences toward working.

Another key impact on employment rates is the child penalty, or the impact of having children on women’s employment relative to men’s. While the child penalty shrank for all women in the 80s and 90s, the impact began to impact women differently after 2000: the penalty continued falling for mothers with a college degree, but stayed the same for those who did not go to college, according to the report.