Women in their prime working years are storming back into the labor force.
In June, 77.8% of women age 25 to 54 were working or looking for jobs, up from 77.6% in May and the highest in U.S. history, the Labor Department’s recent jobs report showed.
The labor force participation rate for men also has risen steadily but, at 89.2%, is still slightly below its pre-pandemic peak.
Women were especially hobbled by job losses early in the health crisis and are now benefitting from a robust recovery as well as the wider availability of child care, remote work options and other factors.
So many women lost jobs in early 2020, "They called it a she-cession," says Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research.
What is the labor force participation rate?
Their return to the job market has helped boost the broader U.S. labor force participation rate from 60.1% early in the pandemic to 62.6%. The larger pool of workers has made it easier for businesses to attract workers and slowed sharp wage growth, helping ease a historic inflation spike.
Still, the overall participation rate remains short of the 63.3% pre-COVID level, largely because of the early retirements of baby boomers during the health crisis, says economist Dante DeAntonio of Moody’s Analytics. He doesn’t expect the nation to reclaim its pre-crisis participation rate because boomers continue to retire in large numbers and most who stopped working sooner than planned aren’t coming back.
So far this year, the pool of 25- to 54-year-old women working or job hunting has swelled by 815,000 after a gain of 448,000 in 2022.
Are more women working than ever before?
They’re not just looking for jobs – they’re landing them. The share of prime-age women who are employed also hit an all-time high of 75.9% last month.
For four decades, a sharply rising share of prime-age women entered the workforce but their participation rate peaked in 2000 and then dipped during the 2001 dotcom recession and the Great Recession of 2007-09.
Here’s why women aged 25 to 54 are now in the workforce in record numbers:
Economic recovery lifts more women
The pandemic led to heavy job losses in customer-facing service industries that employ more women than men, such as leisure and hospitality (which includes restaurants, bars and hotels), retail, health care and education.
As COVID has eased, most of those sectors reached and then topped their pre-COVID payrolls because of pent-up customer demand, says Hershbein.
Hot job market
Pandemic-related worker shortages triggered record job openings and wage growth last year. That has drawn in women who left the workforce during COVID, DeAntonio says.