Academic journal article Monthly Labor Review

Husbands' Job Loss and Wives' Labor Force Participation during Economic Downturns: Are All Recessions the Same?

Academic journal article Monthly Labor Review

Husbands' Job Loss and Wives' Labor Force Participation during Economic Downturns: Are All Recessions the Same?

Article excerpt

The recent economic recession, widely dubbed the "Great Recession," (1) has brought several issues that typify challenging economic times to the fore of both family life and national policy discussions. Recessions are generally characterized by high unemployment, income declines, losses on investments, high rates of home foreclosures, and a reduction in the availability of credit. (2) As a result, families often face daily pressures during recessions and must find ways of dealing with new economic challenges.

Although the Great Recession is widely acknowledged as the nation's worst financial situation since the Great Depression, research is just beginning to reveal how it compares to previous recessions. (3) During the Great Recession, job loss among the highly educated was more prevalent than in other recent recessions, (4) and women's increased education may have allowed families new options in responding to economic strain. One strategy couples have been using since at least the Great Depression is to have wives who were not in the labor force seek employment if their husband stops working. (5) Such a strategy can both buffer income loss and, in some cases, provide continued access to employment-related benefits, including health insurance coverage.

Although the proportion of families characterized by a sole male breadwinner declined from 56 percent in 1970 to 25 percent in 2001, (6) many married couples at the onset of the Great Recession were made up of an employed husband and a wife outside of the labor force. Given the changing demographics, increased female education, and economic restructuring over the past 30 years--all factors that have increased job opportunities for women (7)--one might expect wives in sole male breadwinner families to be better prepared to enter the labor force during the Great Recession than during past recessions.

Previous research found that wives who were out of the labor force more often sought and found work during the Great Recession if their husband had stopped working than did wives of husbands who stopped working during 2004-2005, a period of relative prosperity. (8) However, this change was not equal for all women: wives with at least some college education were more likely to enter the labor force and more likely to find work than were those who had not completed high school, indicating that education was an important determinant of both seeking and landing a job. Likewise, the economic context during which the husband stopped working (i.e., whether the country was in recession or not) played a role in whether the wife undertook a job search and gained employment. Wives were less responsive to husbands' job loss during 2004-2005, years of economic prosperity. (9) Given that the Great Recession had much worse economic outcomes compared with previous recessions, these factors in combination may translate into an environment where wives were much more likely to enter the labor force during the Great Recession than in earlier recessions.

Despite declines in the gender wage gap, women still typically earn less than men, (10) and employed wives contributed 47 percent of total family earnings in 2012. (11) This means that wives' earnings, although important, are typically not sufficient to maintain households when husbands experience job loss. For example, research based on longitudinal data from the Panel Study of Income Dynamics from 1968 to 1992 shows that wives' increased employment in response to husbands' job displacement only replaced about 25 percent of husbands' lost income. (12) Although somewhat outdated, this finding raises the question of how well wives who enter the labor force are able to augment their family income. We speculated that wives may have been pushed during the Great Recession into jobs that they would not have otherwise considered. (13) Some of these wives may have taken jobs that were readily available and easy to enter, such as those in the services sectors. …

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