Data shows women are leaving the workforce. What does that say about the economy?

0:00It's Consider This, where every day we go deep on one big news story. Today, women in the labor force. For decades, one of the most reliable trends in the American economy has been the growing number of women working. But lately, government data shows women's participation in the labor force has been falling. Some of the jobs where women are concentrated, including education and government jobs, have been hit by cuts. But there are other reasons, too, like employers scaling back remote work and the cost of child care. The costs are going up and also they need to be able to have that flexibility in order to manage everything.

0:38Priya Rathod, formerly a workplace trends editor at Indeed, spoke to CBS Mornings in April. And when we see workforces reducing that flexibility, you're pushing these women out and frankly you're losing all of the great experience that they are here to give you. Consider this. Data shows that women are leaving the workforce. Is it a short-term dip or something bigger? and what does it all mean for women and work in America?

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2:30It's Consider This from NPR. There's new data on women leaving the workforce. Why? And is this a short-term blip or something bigger? We put those questions to Betsy Stevenson. She's a professor of economics and public policy at the University of Michigan, and she studies work, families, and gender. Betsy, welcome. It's great to speak with you. Great to talk with you too. Okay, I want to start just big picture here. When you look at what's happening with women's participation in the workforce right now, what stands out most? I think there's really a glass, half full glass, half empty story that we could tell right now because we definitely see a downward dip happening, but it's coming off of the highest labor force participation rate for prime age women.

3:21And that Prime age is something economists use to refer to people who are between the ages of 25 and 54. So I don't want to put too much pressure on the downward trend and say this is really important because historically we're still seeing high rates of labor force participation. I have been following this topic closely and I couldn't help but see all over my social media. There was a lot of attention on data from the Bureau of Labor Statistics. The National Women's Law Center says it should women accounted for essentially all of the recent decline in labor force participation. How much should we read into that analysis?

4:01I think we want to be really careful about looking at any kind of month-to-month trends, particularly when it comes to labor force participation. The survey is quite noisy. It's not that many people. And so when I look at the longer term trends, I still saw really optimistic growth in women's labor force participation in overall in 2025. And the declines we're seeing right now, you know, some of it is that women, when they can't find work, seem to be leaving the labor force, which just tells us they have something else to be doing rather than being unemployed. Whereas what we're seeing for men is that they are experiencing that time period as an unemployed person.

4:53You know, I don't like to see women leave the labor force, but I also want us to be careful about over-interpreting those movements in our modern times because people move from out of the labor force back into employment quite a bit. One thing that I think about a lot when we think about these issues is the cost of working. For families with young children, how does the cost of child care change the calculation about whether a second parent works as well as how much they work? This has been an ongoing problem for families for decades, which is that child care is extremely expensive. And some people shrug their shoulders and say, OK, well, then women can just stay home.

5:35The problem for women is if you've got a young child at home, the math might work out such that at least for your budget this month, your best bet is just stay home and avoid all the costs of working. The problem is that the benefits of work are not just the wage you're making today, but the skills and experience you're developing that will impact your wage in the future. So what women are giving up when they stay home because childcare has become so expensive, because gas to get to work has become so expensive, because all the food that they need to buy because they're not at home to make food has become so expensive.

6:19So they say, well, I'm just going to stay home and I'm going to make some of this stuff myself. I'm going to look after my kids myself. What happens is when they try to go back to work, they find that they've been set back and they're going to earn a much lower wage. So the cost is, it can be quite big. And we know that women often, it's described as women paying to work, right? I'm gonna pay now to work today because I know 10 years from now, it's gonna pay off. So women are constantly asked to invest in their career with facing a high cost of work. And what happens is when budgets get too tight in families, they can't afford to make those investments.

7:05I just want people to think about that because who's going to pay the price for this? It's not even just the women today who are stepping out of the labor force right now. It's where they're going to be in five or ten years. I mean, there's also the question of flexibility considered here because during the pandemic, so many employers, including ours, learned that people could work remotely or with more flexible schedules. And now we're seeing many companies bringing workers back into the physical office, the workplace. How important is that shift when we think about this for women, particularly when I think about women who have children or perhaps even other caregiving responsibilities for a loved one?

7:41This is definitely going to impact women more than men because women have, even prior to the pandemic, been more likely to seek out flexible work arrangements because those flexible work arrangements, as you said, allow them to balance their work with their family caregiving needs in a way that helps keep costs down and also keeps costs like commuting costs down. So they're not spending as much time on the road and they can do more for their employer, more for their family. I think what we saw in particular was as we saw an explosion in work from home, that really helped push college educated women with younger kids into the labor force.

8:25Although I should actually clarify, it's more that it keeps them in. When you're able to work remotely, not even every single day, but a few days a week, it removes some of the burdens and stresses and allows women to keep working even as they face challenges with child care, challenges with their family's needs. It gives that little bit of buffer. And so we see fewer exits of women with young kids. I also, Betsy, want to talk about the demand side of this. We have women potentially leaving the workforce at the same time that some female-dominated industries are losing jobs. So how do we distinguish between women who are choosing to work less and women who are having fewer opportunities to work?

9:07You know, these things go hand in hand. You know, supply and demand come together. It's kind of like asking whether it's the top blade or the bottom blade of a pair of scissors that cuts the paper. You need them both to be working. So why do women choose to step out? Well, they might choose to step out because the opportunities aren't good enough to keep them there. And I think whether women are choosing or whether they've been pushed out because they were working in government and lost their job, I think what we're seeing is a situation in which we do not have a robust enough job creation environment.

9:46We do not have a robust enough set of labor market opportunities to have as many women make the choice to work as we're making that choice a year ago. We've been speaking with Betsy Stevenson, economist at the University of Michigan. Betsy, thanks. It was great talking with you. This episode was produced by Alina Mohamed and Karen Zamora with audio engineering by Hannah Glovna and Robert Rodriguez. It was edited by Sarah Handel and Tenbeat Ermias. Our director is Alejandra Marquez-Hance. Our interim executive producer is Courtney Dorning.

10:26It's Consider This from NPR. I'm Juana Summers. The midterms are coming, and that means the news cycle, which is already intense, is about to get more intense this fall. So this summer is a perfect time to make sure your news diet is calibrated. I'm Leila Fawdel. On Up First, we unpack the three biggest stories every morning so you can stay informed and get on with your day in less than 15 minutes. Follow or subscribe to Up First today wherever you get your podcasts. When life gives you lemons, what do you get? Negative utility. What do you think this is, Darian? See it together from Planet Money, the home of economic nerdiness.

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