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How businesses can learn from the outsized impact of Covid-19 on women in the workforce

Rachel Lojko
Rachel Lojko
Head of Proposition Sales for the Americas at Refinitiv

Data shows that women in the U.S. have disproportionately felt the impact of the economic shocks created by the Covid-19 pandemic. The data is a wake-up call for businesses to understand the need to protect women’s jobs and ensure they are proactively supporting diversity in the workforce.


  1. Women are leaving the U.S. workforce at a greater rate than men in an alarming trend that is being driven not by just the economic downturn brought about by the Covid-19 pandemic, but by an outsized impact on women.
  2. Fewer women actively participating in the economy could reverse the progress made in narrowing the gender pay gap in the U.S. labour force and damage prospects for economic growth.
  3. Businesses are in strong positions to focus on a post-Covid-19 recovery by addressing the gender experience in the workforce.

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Women are leaving the U.S. workforce at a greater rate than men in an alarming trend that is being driven not by just the economic downturn brought about by the Covid-19 pandemic, but by an outsized impact on women.

As families continue to juggle the challenges of working and family life, including home schooling, many women are leaving the workforce due to lack of support, high childcare costs and gender pay gaps. This trend raises concerns about the crucial role that women contribute to the $20.8 trillion U.S. economy[1] – the world’s biggest market – and what employers are doing to help protect women during economic shocks.

From the second half of the twentieth century as U.S. economic growth started to accelerate, women baby boomers (born between 1946 and 1964) entered the labour force in large numbers from the early 1960s. They enthusiastically boosted the labour force participation rate of women.

Despite a clear upward trend in the U.S. labour force participation rate for women since the 1960s (see Figure 1), the pandemic continues to take its toll on the availability of women’s jobs (see Figure 2), as did the Global Financial Crisis a decade earlier. Approximately 2.3 million women have left the U.S. labour force since January 2020.

Figure 1: Covid-19 impacts U.S. labour force participation rate for women

Source: Datastream – Click on the chart to request a free trial

[1] World Economic Outlook Database, October 2020, IMF.org.

Figure 2: Number of women in the U.S. labour force is shrinking compared with the number of men

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As Figure 1 shows, women have accounted for approximately 50% of Non-Farm Payrolls in the U.S. over the past 10 years. However, during 2020, the year-on-year growth rate of women as a percentage of Non-Farm Payrolls declined substantially (see Figure 1). Compared with men, the female labour force has shrunk at a consistently greater rate since the pandemic took hold in March 2020 (see Figure 2).

At the height of the first wave of the Covid-19 pandemic in April-June 2020, the unemployment rate for women peaked at 16.1% but for was lower for men at 13.6% (see Figure 3) – yet still a historically height level for both groups. North of the border in Canada, women have also continuously lost more jobs than men since March 2020 (see Figure 4).

Figure 3: U.S. unemployment rate – women vs men (2019-2021)

Source: Datastream – Click on the chart to request a free trial

Figure 4: Women in Canada have lost more jobs than women vs men (2020-2021)

Source: Datastream – Click on the chart to request a free trial

Covid-19 has impacted black and Hispanic women more

While the headline U.S. unemployment rate in 2021 shows that women and men are largely facing similar unemployment rates at over 6%, the pandemic is impacting black and Hispanic women (~9%) more than white women (~5%) (see Figure 5). And though labour force participation rates are highest among black and Hispanic women versus white women, the year-on-year decline is deeper among black and Hispanic women in the Covid-19 era.

Figure 5: U.S. unemployment rates for Black, White and Hispanic women (2019-2021)

Source: Datastream – Click on the chart to request a free trial

Women and minority labour force participation more affected

In a November 2020 report called Pandemic Disproportionately Affects Women, Minority Labor Force Participation, the Federal Reserve Bank of Dallas explains how certain women are most affected.[2] ‘Women with children, particularly black women and those without a bachelor’s degree, faced the sharpest declines and have recovered at much slower rates relative to those without kids,’ according to the report.

[2] https://www.dallasfed.org/research/economics/2020/1110

Considering that the current labour market conditions are unique to the pandemic and will return to pre-pandemic levels, the report’s authors suggest otherwise. Drawing on the relatively recent experience the report concludes: ‘The slow recovery from the Great Recession tells us that declines in participation rates, particularly for vulnerable demographic groups, can take years to fully recover, and they hinder overall economic growth.’

Supporting women, driving economic growth

Fewer women actively participating in the economy could reverse the progress made in narrowing the gender pay gap in the U.S. labour force and damage prospects for economic growth. According to a McKinsey & Company study gender diversity does matter: ‘Companies in the top quartile for gender diversity on executive teams were 21% more likely to outperform on profitability and 27% more likely to have superior value creation.’[3]

[3] Delivering through Diversity, McKinsey & Company, January 2018

The same McKinsey report found that companies in the top quartile for ethnic and cultural diversity on their executive teams were proven to be 33% more likely to have industry-leading profitability.

So why are supportive diversity and inclusion policies so important to help maintain labour force participation for women, especially during this pandemic? Companies that support their staff during good and challenging times are more likely to foster loyalty, retain valuable employees at all levels across their organisation and improve performance.

Wei Zheng is an Associate Professor of Management and Richard R. Roscitt Endowed Chair in Leadership at Stevens Institute of Technology. During the first wave of Covid-19 on the U.S. East Coast in April 2020, Ms. Zheng conducted research and found various leadership behaviours that supported employees with stability, empowerment and inclusion.[4]

[4] 5 Strategies to Support Your Employees Through a Crisis, Wei Zheng, Harvard Business Review

The research found individualised support was very important: ‘When leaders showed an understanding of employees’ needs, preferences, and circumstances when it came to work arrangements, employees felt it provided the individualized support they needed to help them accomplish work goals.’

Addressing the workplace security gap

Data shows that women have less favourable experiences of workplace security compared with men. Figure 6 illustrates that before Covid-19 women globally had higher job security uncertainty than men. As the pandemic has progressed, however, women have experienced a much higher job security uncertainty compared with men, albeit that today, men face the same job security uncertainty that women did before the pandemic.

Figure 6: Job security uncertainty for men and women – January 2020 vs March 2021

Source: Datastream – Click on the chart to request a free trial

Finding a solution together

A problem that is measured by trusted data is a problem that is identified and ultimately one that can be addressed with proper action. Businesses are in strong positions to focus on a post-Covid-19 recovery by addressing the gender experience in the workforce. They can also ensure that they are doing everything they can to protect the diversity and inclusion credentials in their workforces and learn from major events, such as pandemics, to make sure that more robust protection for women workers is supported going forward.

Please share your thoughts and experiences with me via LinkedIn and Twitter so we can understand how businesses are addressing the outsized impact of Covid-19 on women in the workforce. It would be great to incorporate various views and approaches that businesses are taking in follow-up articles on this subject.

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