Are we all in this together? Alleviating the childcare constraint for women in economic crises

The purpose of the paper is to advocates the use of gendered economic policies to stimulate a post-COVID-19 recovery. It alerts on the risk of ignoring the female dimension of the current crisis and of resorting again to austerity programs that, like the ones enacted after the 2008 crisis, would hit women and mothers disproportionally harder than other groups.

The authors use data from the British Household Panel Survey on female participation and account for gendered constraints and enablers missed by mainstream economics. Using a sequential empirical approach, the authors simulate various welfare policy scenarios that address factors, such as childcare costs, personal and social nudges, that could help women back into the labor market in the aftermath of a crisis.

The authors found that incentive-type interventions, such as subsidies, promote female labor market participation more effectively than punishment-austerity type interventions, such as benefits' cuts. Policies oriented to alleviate childcare constraints can be sustainable and effective in encouraging women back to work. Considering factors wider than the standard economic variables when designing labor market policies may provide fruitful returns.

The sequential methodology enables to estimate current and counterfactual incomes for each female in the sample and to calculate their prospective financial gains and losses in changing their labor market status quo, from not employed into employed or vice-versa. Welfare policies affect these prospective gains and losses and, by interacting with other factors, such as education, number and age of children and social capital, prompt changes in women's labor market choices and decision.