Charts That Count: how to get more women in the workforce
FT Alphaville's Brendan Greeley compares female labour participation rates in the US, Canada and Sweden and looks at how policy affects the number of women in work.
Produced and filmed by Gregory Bobillot. Edited by Donell Newkirk.
So we're looking at prime age employment to population ratio for women. Prime age just means that they're of working age - takes care of education decisions, takes care of retirement decisions. Employment to population ratio means this is people among that age group who are either looking for work or have work. So this takes care of the problem that you have with the standard unemployment measure, where you're only looking at people who happen to be looking for work right now. So we're looking at this measure for three countries over time.
Up here we have Sweden. It's not really fair. They're incredibly enlightened in terms of their family leave policies. They've had them since 1900. They've had maternal and paternal leave since 1974. But we have to have them up there because they are the gold standard for this measure.
Then you have the United States. We're going to come back to the US in a second. And then down here at the very beginning, you have Canada.
As you can see, these measures change over time. Why is it important to take a look at this? First of all, fairness matters. That is a worthy policy goal. OK, but also overall, particularly in the United States, the share of workers in prime age overall has been falling. Men have been leaving the workforce for a couple of different reasons. But women have not been replacing them at the same rate that they used to.
This is a problem for the United States beyond basic fairness, because if you have more workers, then your potential GDP is higher. It's not just about fairness, it's also about growth. What affects this measure? Some of it is just cultural.
In some countries, it is considered more important for women to stay at home with the children. Very difficult to change culture with policy. It is also cyclical. Right here at the height of the euro crisis and at the tail end of the financial crisis, we see that this measure dropped for all three countries. It dropped more precipitously for the United States, but it dropped everywhere.
When there are fewer jobs to be had, people make different decisions about whether they want to be in the workforce or not. But it also can be affected by policy. Policy matters. And we'll show you why.
In 2000, the United States was seventh in this measure Prime Age Epop for Women. By 2017, United States was 22nd. So something happened.
Let's take Canada as an example. In 2001, they changed their family leave policy. So it used to be that women could get 10 weeks off after having a child. After 2001, that was extended to 35 weeks, and it applied to women and men. You can see the difference right here. So there are a couple of other policy measures that will make a difference in Prime Age Epop for Women. So leave policies make a difference.
Also, about a third of the countries in the OECD offer the right to negotiate for part-time work. If you can work part time when you have young children, it makes the decision to stay in the workforce a lot easier. Also, the United States spends about a quarter of the OECD average on support for childcare. Obviously, this is incredibly important as well.
If the feds are helping you take care of your kids during the day, it definitely changes the decision on childcare. So this measure, working age women in the workforce, is cultural, it is cyclical, but it is also fixable. Disclosure, I have four kids and I have a wife who works and has much nicer hair than what I've drawn here. So I'm invested in this policy outcome.