The implications of Covid and this recession on female employment

Some refer to it as shecession, others as pink-collar recession, to underline how, compared to previous ones, this crisis disproportionately affects the labor market and the employment prospects of female workers. Employed in the sectors more exposed to health risk during the acute phase of the epidemic and in the most affected sectors by the economic crisis, female workers are now more at risk compared to the financial crisis of 2008-2009, referred to as mancession, since it had affected man-dominated sectors such as construction and heavy manufacturing.

In the United States, the National Bureau of Statistics reports that women account for 55% of the 20.5 million American workers who lost their jobs in April, so for the first time in a decade the female unemployment rate has risen above their male counterpart. In the UK, the Institute for Fiscal Studies estimates that one in six women works in sectors that have been shut down during the lockdown period, resulting in temporary or permanent job losses, especially for low-skilled occupations. ISTAT estimates that the female inactivity rate in April increased by 2.3 percentage points compared to the previous month and by 4.3 points compared to April 2019, while the male inactivity rates increases for the same periods were 1.6 and 3.7 respectively.

While Covid was originally referred to as "the great equalizer", a closer look at the employment characteristics of the most affected sectors (in terms of health and economic risk) gives a picture of the impact of the crisis between the genders that is far from being equal. In an already fragile context such as Italy, which shows the lowest female activity rate in the European Union, the asymmetric nature of this crisis risks to further weaken the unsatisfactory female participation in the labor market. 

The gender gap in Covid's mortality rate (over 50% higher for men, according to studies available so far) has been widely studied by virologists and epidemiologists and is known to the public. Biological, genetic and behavioural factors seem to be at the root of this divide. However, women appear no less vulnerable to infection. The last available data (26 May 2020) shows an opposite gap: in Italy, infected women outweighed men by 18 percent. In particular, it is the younger cohorts of the population, those of working age, who show the widest gap: below age 60, women infected are 23% more than men.

Other factors, in addition to those mentioned above must be hypothesized to explain this gap in younger cohorts. In particular, the employment profile and the resulting exposure to risk could be key elements to understand the high infection rate among younger women. This suggestion is confirmed by the analysis of the female employment contribution according to the sectoral risk indicator developed by INAIL. The Institute has in fact developed a Covid risk exposure indicator based on three parameters (exposure, proximity and aggregation) for each productive sector [1]. The risk scale is composed of four levels: low, medium low, medium high, and high.

According to the indicator, women are employed in higher risk sectors more than men, with a gap of 5 percentage points in both medium-high risk and high-risk sectors. The female-dominated professions, in the health care or hospitality sectors for example, are therefore more at risk of infection. 8% of the employed women work in the highest risk class, compared to 3% of their male colleagues. The percentage increases to 13% (compared to 5% for men) if only "essential" sectors (according to the DPCM of 22  March 2020) are considered, showing that female workers were exposed to a higher percentage to health risk during the lockdown.

The economic crisis being wrought by the pandemic is structurally different from the most recent recessions, especially in the distribution of the most affected sectors and workers. The financial crisis of 2009 had led to a significant contraction of male-dominated sectors, such as construction and manufacturing sectors including metallurgy and automotive. The current recession, characterized by the lockdown of activities with high social interaction, is hitting the hardest hotels, restaurants and retail, in which women tend to be more represented in respect to the most penalized sectors ten years ago. In 2009, among the ten sectors that recorded the greatest contraction in turnover, only two were sectors of female specialization [2] (Home appliances and Other manufacturing products), in 2020 it is estimated that there will be four (see figure 2). In particular, among the manufacturing sectors, the sector with the highest female specialization, the fashion system, is among the most penalized by the current crisis.

As far as services are concerned, the Hotels and Restaurants sector, which in 2009 recorded a 0.9% drop in turnover, is now expected to contract by 26.2%. The sector is among the ones with the highest relative female contribution (49%) and employs 12% of female workers, compared to 7% of male employees.

Another key to assessing the impact of the Covid crisis on labour is to observe work from home (WFH hereafter) practices. The possibility of working remotely differs across sectors, and it is an important element that has guaranteed or not continuity of activity, income and prospects during the most intense phase of the lockdown and that still today marks the organization of many productive activities. 

The conversion of many of the essential activities into WFH has protected only a part of the female workers from the occupational risk and even in this case in a lower share with respect to male workers. According to the indicator that measures the possibility of working remotely drawn up by Inapp-ICP [3], the four sectors with the greatest difficulty in converting activities into WFH are hospitality and restaurants, retail, construction and healthcare. Overall, these sectors employ 43% of female employees, and only 33% of male workers. In contrast, more traditionally male-dominated sectors such as the financial, banking and insurance industries, and most professional services, display high levels of the indicator. Figure 3 shows the distribution of employees by gender, divided into five classes according to the WFH index. The gap of ten percentage points highlighted in the macro-sectors is also confirmed by a finer analysis of the production sectors.

Contractual stability is an additional element of attention in assessing the impacts on female employment, considering that the renewal rate for precarious workers is expected to decrease due to the difficult economic situation. 16% of female employees have a fixed-term contract, a slightly higher share than that for male employment. However, almost all of the gap with men in employment is concentrated in the 15-29 age group, where the gap widens to five percentage points and where being out of work today is likely to affect future prospects (in terms of career, but also in terms of choice to participate in the labor market or not).

The 15-29 age group is also the one in which the gap between male and female participation rates is at a minimum, both with respect to other age groups and historically (figure 5). In this sense, the risk of the crisis hitting young female workers harder would translate into a threat to the growing trend of female participation in the labor market, in an age group crucial to the choice of entering and remaining in the labor market.

Historically, shocks can lead to persistent economic and social change. In other articles, we have highlighted, for example, how consumption patterns will continue to be affected in the future by the impact of the emergency phase of the crisis. Similarly, in this context, the risk is that the positive trend in female employment may come to a halt, or even reverse. The burden of housework and remote school management during the crisis [4] is a wake-up call and could be a further incentive to abandon or reduce working hours. Past experience [5] and the particular static nature of the Italian labor market suggest that job losses, especially during a recession, may leave scars in the economic framework, in terms of reduced incomes and opportunities, that could last for years.

It is also necessary to consider this issue not only from a gender perspective, but also in terms of the country’s development and growth. Compared to the past, the composition of income in households has changed a lot, and a shock on female participation in the labor market would result in a much heavier shock on household income than in previous crises. According to the Bank of Italy survey, in more than a third of Italian households the primary earner is a woman (Figure 6), a share that has grown by two and a half times in forty years. 

The analysis of the demography of the crisis has to do not only with issues of equality, but also with the impact on the income of families, which cannot rely, as in the more "classic" crises, on the income of women, employed for the most part in traditionally anti-cyclical sectors [6].