A move to increase the retirement age might hurt women's participation in the labor force. Retired grandparents play a critical role in the provision of child care in China. More than 50% of 2-year-olds are looked after by a grandparent, and economists estimate that the free child care provided by grandparents is a major factor in a woman’s decision to stay in the labor force. It’s why the country has some of the highest female labor force participation rates in the world; 61.5% of women are in the labor force, compared to 55.7% in the US and 60% in Scandinavia.
For some Americans, things have gotten markedly worse in the last decade or so. Consider the changing fortunes women without a college or associate’s degree in their prime working years (what economists define as the ages 25 to 54). A striking one-third of women in this group have dropped out of the US workforce, meaning that they’re neither working nor looking for work. This helps explain why the official unemployment rate is so low; since people count as “unemployed” only if they’re actively searching for a job, these women are hidden from that data.
The study, by economists Shushanik Hakobyan of the IMF and John McLaren at the University of Virginia, looks at changes in earnings among different populations of workers before and after NAFTA, which eliminated tariffs among the US, Mexico, and Canada. The authors of the study did not find large or significant changes in earnings for blue-collar married men after the trade pact was established. Among single people, of both genders, there was a drop in wages, but it was small and not always statistically significant. But no matter how they specified their model, wages for uneducated, married women tanked after NAFTA.
Economics has a woman problem. Women are under-represented at both the undergraduate and graduate levels. Following scandalous research that laid bare the “cesspool of misogyny” on the popular Economics Job Market Rumors website, the profession has done a fair amount of self-reflection about how it can be more welcoming to women. Economics attempts to explain how the world works, after all, so more diverse representation in the field is important to gain a more complete view of the economy.