Although it won’t get many headlines, one of the most significant numbers in Friday’s jobs report is the employment-population (E-P) ratio among women, which is 53.6 percent. Put more simply, just over half of women age 16 and older have jobs.
If that sounds low, it is. The failure of the E-P ratio to rebound since the recession — in 2007, 56.6 percent of women were working — has been one of the recovery’s more troubling patterns. Although the decline was partly expected with the aging of the population, it has been more dramatic than anticipated and, even more to the point, the E-P ratio among prime-age women, 25-54 years, is down by a similar amount: 70.1 percent today, versus 72.5 percent in 2007. (Men have struggled much the same; the E-P ratio for prime-aged men is 84.5 percent, compared with 87.5 percent in 2007.)
This stubborn sluggishness should give Fed policymakers pause when considering raising interest rates. Low E-P ratios tell us the labor market isn’t nearly as strong as the unemployment rate indicates.
But today, my purpose is not to debate monetary policy. Instead, for Mother’s Day, I want to highlight something the official statistics never consider: Many women’s most important job takes place outside the labor market. It’s called being a mom. Failure to appreciate this can, and often does, lead to short-sighted, misguided labor market policies.
Consider this simple accounting exercise: 70 percent of prime-age women are working and about 74 percent are moms. Of course, these groups also overlap — 48 percent of women fall into both categories. Putting it all together, roughly 96 percent of prime-age women are either working or parenting or both. Call it the EMP ratio: employed-and/or-mom to population ratio. In other words, nearly all American women age 25-54 are substantially engaged in productive and societally important activities. (The EMP ratio is about 88 percent if we only consider those with children under 18, but in this day and age, does anyone really believe parenting responsibilities end with high school?)
Why is this important? An enormous body of research spanning economics, biology, neuroscience, sociology and psychology points to the huge impact parents have on their children’s future outcomes, including health, educational attainment, employment and earnings. To take just one example, Nobel Laureate James Heckman has shown that test scores among children in the lowest income quartile, on average, rank 15 percentiles below those in the top income quartile—by age six. Put differently, the disparities that are already in place by the time kids begin school account for more of their relative performance in seventh grade than do all of their experiences while in school.
Source: Fiscal Times | Mike Cassidy