33-year low in female labor participation rate requires new childcare and paid-leave policies, JPMorgan says

• Federal family-leave and childcare support policies can help close gender gaps, JPMorgan said.
• Female labor participation sits at 33-year lows and well below mens' level due to COVID-19 fallout.
• Gender-responsive policies can counter the disproportionate hit women faced during the pandemic.

Full economic recovery in the US might not be enough to close gender gaps exacerbated by the pandemic, JPMorgan researchers said.

The coronavirus and its economic fallout disproportionately slammed American women, with female-dominated sectors like hospitality and education hit the hardest by lockdowns. The greater share of domestic work that women perform in American society also prompted many to leave work and focus on caretaking. Where men made up the bulk of job losses seen during the financial crisis, the current recession has seen job losses land more equally.

Women aren't just losing or leaving their jobs, either; they're exiting the labor force entirely. The female labor participation rate, while up from its pandemic lows, still sits at its lowest level in 33 years. More than 2.3 million women have left the US labor force since the pandemic began, versus nearly 1.8 million men exiting the workforce.

Reviving the broader economy should pull some women back into the labor force, the team led by Joyce Chang said in a note to clients, adding Congress can and should do more to close the gap. Federal paid-leave policies for mothers can alleviate the burdens of balancing work with early child care, as can federally guaranteed family leave. Public child care and education programs can also incentivize women to stay employed, according to the team.

The nation's gender pay gap held at roughly 18% for the past decade, and that spread could widen by another five percentage points if the pandemic's effects aren't reversed, according to a National Bureau of Economic Research paper cited by JPMorgan. Recessions historically fuel a 2-point narrowing of the wage gap.

Closing the gender wage gap is good for growth, nevermind society

Promoting workplace equality also has a tangible effect on economic growth. Narrowing the labor-participation gap between men and women by just 25% could lift US gross domestic product by 2%, according to the International Labor Organization. Fully closing the gap would boost GDP by 5%, the International Monetary Fund said.

"Continued focus on gender-responsive policies is required to counter the disproportionate burden women face in the current crisis - and more importantly, to prevent the economic damage from outlasting the virus itself," JPMorgan's researchers said.

Some steps have already been taken to help working women. Democrats' latest stimulus plan includes a child-tax-credit program that will give families with children under the age of 5 up to $3,600 per child over the course of 2021. Those with children aged 6 to 17 can receive up to $3,000 per child.

The package also includes $40 billion for child-care assistance. The average US household spends nearly 23% of its income on child-care costs, according to JPMorgan. The stimulus' inclusion of a child tax credit and direct relief for care providers helps lower the burden for mothers hoping to keep their jobs while raising children.

Erasing such inequality stands to build a more robust economy after the pandemic, the researchers said. The coronavirus crisis has prompted discussions around family support and flexible work arrangements "that could yield steps forward in the future," they added.