Female labour-force participation in the US has stalled. Is anywhere doing better?

Over the course of the past three decades, female labor force participation has progressed in many places, but remains behind the rates for male participation in the labor market. In the U.S., the growth of female labor force participation stalled, while South Korea is still showing extreme gaps between male and female participation despite past gains.

The labor force participation rate of U.S. women between the ages of 25 and 64 stopped growing in the year 2000, according to the OECD, and in 2020 was back down to 1993 levels. The coronavirus pandemic seems to have left a significant dent in U.S. female labor force representation in 2020. The same dip is visible in Japan, South Korea and also in male labor force participation in the OECD overall.

By comparison, many other industrialized countries experienced significant increases in the female participation rate over the years and skipped the Covid lull, for example France, Germany or the UK, which achieved female labor participation rates between 75 and 80 percent most recently.

Some economists believe that the fractured state of parental leave in the United States is one of the factors contributing to the plateau in women’s labor force participation during their prime working years. Another reason for the low labor force participation could be related to the ripple effects of the Great Recession. Many workers did not reenter the labor force after the 2008 financial crisis because of stalled wages.

While South Korea’s female labor participation rate increased by around 12 percentage points in 30 years, it still stands at only 64 percent. As the chart shows, Japan achieved the steepest climb. After sub-par participation persisted until the 2010s, Japan achieved a rate increase of 10 percentage points just in the past 10 years and now boasts a rate similar to that of France.

The labor force participation rate measures what portion of a population is currently employed or looking for work. It therefore includes the unemployed, but not those which are not searching for a job. Engaging prime-age workers in the economy is important for efficiently generating growth by utilizing all the labor resources available for producing goods and services in a given country.