Gender gap in jobs market widens as economy starts to recover

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Women accounted for three-fifths of new applicants for the Canada Emergency Response Benefit since late June, the latest indication of a widening gender gap in the jobs market as the economy begins to bounce back from its unprecedented plummet in the spring.

There is a similar split between women and men in how quickly participation rates are rebounding, and in other data. They all point to a labour market where men are benefiting more, and sooner, than women.

The gender gap is emerging as a significant challenge for Ottawa and the provinces, as policy makers try to square public-health measures aimed at containing the coronavirus with the need to fully reopen daycares and schools so that parents – primarily women – are able to return to work.

On Thursday, Ottawa announced $625-million in new funding for child care as part of its $19-billion assistance package for the provinces and territories, an amount well short of what child-care advocates say is needed.

According to weekly data released by the federal government, women applicants made up 61 per cent of those receiving the CERB for the first time between June 28 and July 12, with male respondents accounting for 38.8 per cent and gender-diverse respondents for the remainder.

That imbalance extended across most of the country: In Saskatchewan, where the gap was biggest, 63.8 per cent of new applicants were women; in Ontario, 63.5 per cent of new applicants were women. Only in Newfoundland and Labrador, with a relatively small number of new applicants, did men outnumber women in that time period.

Stéphanie Lluis, an associate professor of economics at the University of Waterloo, said the CERB statistics indicate that the economic recovery to date is benefiting men more. But she said additional data points are needed to firmly establish any trend.

The trend is just starting to come into focus, in part because the government only began publishing demographic and geographic information on CERB applicants three weeks ago. For all applicants since the start of the program in early April, men still outnumber women. But those cumulative numbers include those who received the benefit at one point, but now have returned to work.

However, other data are showing that same trend. Participation rates in the work force (which include Canadians who are working or looking for work) are showing a persistent gender gap, as the graph below indicates. Women with a child aged 6 to 17 saw the biggest drop in participation rates, and the slowest rebound. Their male counterparts have recouped most of their job losses. And men whose youngest child is under 6 have actually gained jobs compared with the precoronavirus period of February.

An analysis of labour-force statistics by Mikal Skuterud, an economics professor at the University of Waterloo, points to a different kind of gender gap, among Canadians who have been permanently laid off, those who are both looking for a job and those who are not. (The latter are often called discouraged workers.)

Women were somewhat less likely to be looking for a job than men, according to Prof. Skuterud’s analysis of June data. But the gender gap widened significantly once the presence of children is included.

An out-of-work father with a child under the age of 12 was slightly more likely to be looking for a job than a man who did not have a child that age. But for out-of-work mothers with a child under 12, that propensity swung sharply negative. Only 42.4 per cent of jobless women with a child under the age of 12 were looking for employment, compared with 51.7 per cent of jobless women with an older child or no child at home.

Prof. Skuterud says he sees a combination of fears of the coronavirus, the lack of widely available, safe daycare and the structure of the CERB acting to slow women’s return to the work force.

Daycare capacity has fallen sharply since February, particularly in Ontario, because of public-health rules that reduce the number of children that can be cared for in a single room. In addition, a growing deficit of child-care workers is slowing the reopening of daycares across Canada, as is parents’ reluctance to put their children back into daycares during a pandemic.

Then there is the much discussed disincentive built into the CERB, which claws back all of a recipient’s benefit, once they earn more than $1,000. “There’s no question, this is influencing people’s decisions,” Prof. Skuterud says, while emphasizing that all three factors are working in concert.

Separately, the reasons that Canadians cite for deciding to leave their jobs (rather than being fired or laid off) also show a gender split. Just under 20 per cent of Canadian women who became unemployed in June chose to do so, a slightly higher proportion than the 17 per cent of men who fell into this category.

But the reasons given by women in choosing to leave their jobs show the real gap: 15 per cent of women who quit their jobs cited personal or family responsibilities. Just 4 per cent of men gave that reason. (Prof. Skuterud notes that the number of respondents are relatively small so such variations should be viewed cautiously.)

And women appear to be getting hit harder by permanent layoffs in this downturn, Prof. Lluis notes. Permanent layoffs for women increased by nearly 150 per cent between June, 2019 and June, 2020, more than double the increase for men. While there were still a larger number of men reporting being permanently laid off, the rapid growth in permanently laid-off women closed that gap significantly. (For both men and women, the absolute number of laid-off workers was much higher this June, reflecting the deep economic downturn.)

Prof. Lluis says those results could be explained by job gains in June being focused in sectors dominated by men. Another possibility is that part-time employment, with relatively more female workers, is not bouncing back as quickly as full-time employment. But she said it could be that women are looking at the prospects for daycares and schools fully reopening and coming to the conclusion that their departure from the work force will be long-lived.

However, she said that and other data are still tentative. In addition, there is a “blurry line” between permanent and temporary layoffs since respondents are asked to define which apply to them, an answer that can shift over time as their personal situation becomes clearer.

But Prof. Lluis said the gap between men and women’s experiences in the economic recovery will remain an important question as new data emerge. “It’s certainly something to keep an eye on in the next month, the gender difference.”

Tax and Spend is a weekly series that examines the intricacies and oddities of taxation and government spending.

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