This is not to say that children do not need attention from both parents to develop into academically successful and socially well-adjusted adults--they certainly do. Also, as I will discuss, women are making choices that reflect their desire to balance work and family. These findings bear on the question of how best to support women's work through public policies aimed at helping women and men better manage work and family.
From a macroeconomic perspective, women's incorporation into the economy contributed importantly to the rapid rise in economic output and well-being over the 20th century. Between 1948 and 1990, the rise in female participation contributed about 1/2 percentage point per year to the potential growth rate of real gross domestic product.24 And this estimate does not take into account the effect of the increases in women's education and work experience that also occurred over that period and boosted their productivity. In addition, since 1979, women have accounted for a majority of the rise in real household income. In dollar terms, the gains were greatest for households in the top third of the earnings distribution, but without the increase in women's earnings, families in the bottom and middle thirds of the distribution would have experienced declines.25
Remaining Challenges and Some Possible Solutions
I have argued thus far that we, as a country, have reaped great benefits from the increasing role that women have played in the economy. But evidence suggests that barriers to women's continued progress remain. The participation rate for prime working-age women peaked in the late 1990s and currently stands at about 75 percent.26 Of course, women, particularly those with lower levels of education, have been affected by the same economic forces that have been pushing down participation among men, including technical change and globalization. 27 However, women's participation plateaued at a level well below that of prime working-age men, which stands at over 88 percent. While some married women choose not to work, the size of this disparity should lead us to examine the extent to which structural problems, such as a lack of equal opportunity and challenges to combining work and family, are holding back women's advancement.
As I mentioned earlier, the gap in earnings between men and women has narrowed substantially, but progress has slowed lately, and women working full time still earn about 17 percent less than men, on average, each week.28 Even when we compare men and women in the same or similar occupations who appear nearly identical in background and experience, a gap of about 10 percent typically remains.29 As such, we cannot rule out that gender-related impediments hold back women, including outright discrimination, attitudes that reduce women's success in the workplace, and an absence of mentors.
Recent research has shown that although women now enter professional schools in numbers nearly equal to men, they are still substantially less likely to reach the highest echelons of their professions.30 For instance, 47 percent of students at top-50 law schools are female, and women obtain 40 percent of M.B.A.'s from top programs. Nonetheless, women are still poorly represented among corporate CEOs, as partners in top law firms, and as executives in finance.31Even in my own field of economics, women constitute only about one-third of Ph.D. recipients, a number that has barely budged in two decades.32 This lack of success in climbing the professional ladder would seem to explain why the wage gap actually remains largest for those at the top of the earnings distribution.33
One of the primary factors contributing to the failure of these highly skilled women to reach the tops of their professions and earn equal pay is that top jobs in fields such as law and business require longer workweeks and penalize taking time off. This would have a disproportionately large effect on women, who continue to bear the lion's share of domestic and child-rearing responsibilities.34 Within academia, the short timeframe in which assistant professors have to prove themselves good candidates for tenure by publishing typically overlaps with the period in which many women contemplate starting a family, forcing difficult trade-offs.35
Employers may require the long hours and short absences for good reasons--for instance, the work may involve relationships with clients or accumulating a significant amount of knowledge about a deal or case in a condensed period of time. If it is costly for employees to share information and split the work, then there would be a high premium, in the form of compensation, for those who can work the long hours.36 Workplaces where the income of employees depends on the effort of co-workers, such as law partnerships, also have an incentive to require long workweeks.37
But however sensible such arrangements may be from a business perspective, it can be difficult for women to meet the demands in these fields once they have children. The very fact that these types of jobs require such long hours likely discourages some women--as well as men--from pursuing these career tracks. Advances in technology have facilitated greater work-sharing and flexibility in scheduling, and there are further opportunities in this direction.38 Economic models also suggest that while it can be difficult for any one employer to move to a model with shorter hours, if many firms were to change their model, they and their workers could all be better off.39
Of course, most women are not employed in fields that require such long hours or that impose such severe penalties for taking time off. But the difficulty of balancing work and family is a widespread problem. In fact, the recent trend in many occupations is to demand complete scheduling flexibility, which can result in too few hours of work for those with family demands and can make it difficult to schedule childcare.40 Reforms that encourage companies to provide some predictability in schedules, cross-train workers to perform different tasks, or require a minimum guaranteed number of hours in exchange for flexibility could improve the lives of workers holding such jobs. Another problem is that in most states, childcare is affordable for fewer than half of all families.41 And just 5 percent of workers with wages in the bottom quarter of the wage distribution have jobs that provide them with paid family leave.42 This circumstance puts many women in the position of having to choose between caring for a sick family member and keeping their jobs.
In this context, it is useful to compare the workforce experiences of American women to those in other advanced economies. In 1990, the labor force participation rate in the United States of prime working-age women, 74 percent, was higher than in all but a few industrialized nations. But in the intervening years, while the participation rate of U.S. women was roughly stable, elsewhere it increased steadily, and by 2010 the United States fell to 17th place out of 22 advanced economies with respect to female labor force participation.43 A number of studies have examined the role of various public policies in explaining patterns in female labor force participation across countries. These studies find that policy differences--in particular, the expansion of paid leave following childbirth, steps to improve the availability and affordability of childcare, and increased availability of part-time work--go a long way toward explaining the divergence between advanced economies.44 Evidence suggests that if the United States had policies in place such as those employed in many European countries, female labor force participation could be as high as 82 percent.45
However, these policies entail tradeoffs. Women in other advanced economies are more likely than women in the United States to be employed part time, which could reflect a greater ease in arranging flexible schedules and more time with family, but it also comes with costs, including a wage penalty and fewer opportunities for training and advancement. Such findings raise the question of whether the policies enacted overseas in recent years have had the unintended consequence of making it more expensive for employers there to hire women into full-time jobs with opportunities for advancement, as women are more likely to be eligible for and to make use of such benefits.46
This possibility should inform our own thinking about policies to make it easier for women and men to combine their family and career aspirations. For instance, improving access to affordable and good quality childcare would appear to fit the bill, as it has been shown to support full-time employment.47 Recently, there also seems to be some momentum for providing families with paid leave at the time of childbirth. The experience in Europe suggests picking policies that do not narrowly target childbirth, but instead can be used to meet a variety of the health and caregiving responsibilities.48
Conclusion
The United States faces a number of longer-term economic challenges, including the aging of the population and the low growth rate of productivity. One recent study estimates that increasing the female participation rate to that of men would raise our gross domestic product by 5 percent.49And, as I have argued, our workplaces and families, as well as women themselves, would benefit from continued progress. However, a number of factors, which I have only had a chance to touch upon, appear to be holding women back, including the difficulty women currently have in trying to combine their careers with other aspects of their lives, including caregiving. In looking to solutions, we should consider improvements to work environments and policies that benefit not only women, but all workers. Pursuing such a strategy would be in keeping with the story of the rise in women's involvement in the workforce, which, as I have described here, has contributed not only to their own well-being but more broadly to the welfare and prosperity of our country.
The title for my remarks today, "So We All Can Succeed," was inspired by Malala Yousafzai, the advocate for girls' and women's education, who said, "We cannot all succeed when half of us are held back."50 Brown University has played its own role by admitting women 125 years ago, by educating many thousands of women over the decades, and by continuing to be a place that equips men and women with the means to make our nation and the world a better place.
Editor's Note. See following pages at the Federal Reserve site for footnotes: https://www.federalreserve.gov/newsevents/speech/yellen20170505a.htm
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