The Coronavirus Crisis and Its Impact on Women in the Labor Market: Permanent Damage or a Short-Term Setback with Long-Term Potential?

Executive Summary

With the outbreak of the coronavirus and the shutdown of the economy, many workers were laid off or put on unpaid leave. This study looks at the impact of the crisis from a gender perspective, and shows that the economic shutdown resulted in higher rates of unemployment among women than among men; although women make up just under 50% of employees in the economy, they accounted for 56% of unemployment claims between March 1, 2020 and May 10, 2020. This result is likely to harm the progress made in women’s employment rates in Israel as well as their wages.

Before the coronavirus outbreak

Prior to the outbreak of the coronavirus, Israeli women worked at higher rates than the average in the OECD alongside having high fertility rates, and the hourly gender wage gap had been declining.

• The average employment rate among Israeli women has risen by 20 percentage points over the last 30 years and stands at 75% (84% among non-Haredi Jewish women). This rate is higher than the OECD average (66%), and employment is growing at a faster rate than in the OECD.
• Israel has the highest birth rate in the developed world, at 3.1 children woman, and employment rates among mothers of young children are high.
• The hourly gender wage gap in Israel decreased from 17.3% in 2008 to 15.8% in 2017.
• In 2018, about a third of Israeli women were employed part-time compared to 13% of men; even among people working full-time, women work about 10% fewer hours than men.

Job losses during the coronavirus crisis

Between March 1 and May 10 of this year (2020), 875,000 unemployment claims were filed by workers ages 20-67; about 487,000 (56%) of these were filed by women. More women losing their jobs seems to be a global phenomenon, yet in Israel this does not appear to be because of women’s tendency to work in vulnerable sectors of the economy (as proposed in other countries).

• Israeli women have been hit harder than men across nearly all sectors: in 18 of the 19 industries in Israel (except for real estate), the share of women filing unemployment claims was higher than their share of positions in the industry.
• For example, in the health field, 83% of unemployment claims were filed by women, while their employment share in the industry is 76%. In the information and communications industry, 54% of claims were filed by women while their employment share in the industry is only 41%.
• Young women were particularly hard hit by the crisis – 60.5% of women ages 20-24 versus 39.5% of men of the same age.

Women may have been most harmed by the crisis – more likely to lose their job or be sent home on unpaid leave ­– because they tend to work fewer hours, hold part-time positions, be employed in less senior positions, earn less, and have more difficulty accruing tenure as a result of periods of maternity leave.

• Among working parents, women average 23 weekly work hours while men work 36 hours.
• In most households, women are the secondary wage earners.
• With schools and daycares closed, many families may have chosen to sacrifice the woman’s employment to take care of children: 46% of unemployment claims were by households with at least one child under age 18; 18% by households with a child under 2 years old.
• Single mothers have been particularly harmed by this situation.
• Job losses seem to be more pronounced among Jewish women, with Haredi women hit particularly hard. The share of job seekers who are women in the Arab sector did not change much between the months leading up to the crisis and during the peak in March-April 2020.

Changing workplace and household norms during coronavirus – long-term opportunities for women:

The quick adoption of teleworking during this period is likely to revolutionize the labor market, allowing more flexibility and lessening the need for a physical presence in the workplace – work conditions that may draw more women to higher paying fields where teleworking was less acceptable in the past. Additionally, more men were exposed to the routine of childcare during this time as they shifted to working from home during the shutdown, which may lead to long-term changes in the gender norms around childcare and household tasks.

• A CBS survey conducted at the end of April found that 61% of high-tech workers and 46% of workers in the finance and insurance industry – two of the highest paying sectors – were working from home on the day of the survey, versus 15% or fewer in other industries.
• A third of high-tech companies expressed interest in widening the use of teleworking even after the crisis passes. In contrast, the finance industry – where the lack of workplace flexibility has been noted as a principal factor influencing the gender pay gap – expressed less enthusiasm about continuing telework; the share of employees working from home sank from 46% in late April to just 10% in early June.
• In 2018, in dual-working households, women spent an average of about 43 weekly hours on childcare and household tasks while men spent only about 27, but initial studies in Israel and elsewhere show that men are spending more time on childcare during the crisis.

A major concern arising from these trends is the potential for long-term damage to both women’s employment rates and the gender wage gap, as previous recessions have shown that job losses during a downturn can cause a long-term reduction in future earnings.

At this stage, it is most important for policy makers to ensure that the unemployment period will only be temporary for as many workers as possible so that they do not withdraw from the labor market. For employees who cannot return to their jobs, it is important to create opportunities for improving skills, which will help these workers find better employment in the future. At the same time, it is important to encourage employers to continue allowing flexibility in the workplace and remote work.