Friday, November 27, 2009

The Jobless Gender Gap

Wall Street Journal opinion editorial "The Jobless Gender Gap" (November 27th, 2009) presents an informative piece, with what may be too-simplistic an analysis of the recession's unemployment gender gap.  It argues that the unemployment rate for men has risen because traditionally male sectors have been hit harder, and that government stimulus spending has been unevenly distributed to women, who have lost fewer jobs.

What has happened to men is fundamentally a product of the times.  This recession made America's already declining manufacturing sector decline more rapidly.  About half of all job losses have been in manufacturing and construction, overwhelmingly male sectors.
Government policy has also exacerbated this trend.  The stimulus dollars were disproportionately directed away from those who lost the most jobs.  The Obama administration estimated early this year that more than four in 10 stimulus jobs were going to women, about twice women's estimated job losses.
There are a number of concerns raised by this line of argument.  First and foremost, it is worth noting that numbers delivered from political entities  naturally suffer from a principal-agent problem.

Secondly, and more interestingly, it is unclear that we would expect what happens to men to be "a product of the times."  If employers can easily substitute men's labor for that of women, then we expect that if men are fired, the wages of women go down.  Men are now competing for their jobs.  However, it is not difficult to believe that women, even working women, could have a higher shadow wage than men.  This can mean a higher unemployment rate for women, in spite of the fact that their specific industry was not hit by the recession.

It is worth noting that the industries people are employed in are dynamic--just because men lost jobs in one industry does not mean they will not gain jobs in another.

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