"She Has Returned"... Female Employment Growth Surpasses Male Post-Pandemic

Bank of Korea, 'Evaluation of Women's Employment Recovery' Report
Recovery Centered on Women in Their 20s-30s and Highly Educated Workers

The number of employed women, which had declined more sharply than that of men during the pandemic, has shown a rapid recovery since last year, surpassing the increase in male employment. Although the COVID-19 pandemic severely impacted face-to-face service industries with a high proportion of female workers and reduced labor supply among married women burdened with childcare due to school and daycare closures, the labor market recovery after the pandemic downturn has accelerated a female-centered employment recovery phenomenon known as she-covery.

On the 31st, the Bank of Korea stated in its report "BOK Issue Note: Evaluation of Female Employment Recovery" that "During the pandemic recovery process, the male employment rate increased by only 0.3 percentage points (compared to January 2020), whereas the female employment rate rose by 1.8 percentage points," adding, "By age group, employment among women in their 20s and 30s is increasing, and by education level, employment is rising mainly among highly educated women."

According to the report, during typical economic recessions, male employment is more severely affected, but during the COVID-19 pandemic recession period, a female employment downturn called she-cession occurred. This was because social distancing measures led to a sharp decline in employment in industries with a high proportion of female workers, such as face-to-face service sectors. Additionally, the closure of schools and daycare centers as part of quarantine measures significantly reduced labor supply among married women with heavy childcare responsibilities.

However, since last year, the number of employed women has been rapidly recovering, led by young women in their 20s and 30s. The employment rates of women in their 30s and 20s increased by 4.4 and 4.1 percentage points, respectively, compared to pre-pandemic levels. This youth-driven employment recovery was observed only among women. For men, employment rates rose mainly among older age groups, while employment rates for men in their 20s and 30s actually declined.

Rapid Increase in Female Employment in Non-Face-to-Face Service Industries and Health and Welfare

By education level, female employment is increasing mainly among highly educated women. Employment among low-educated women has remained flat compared to pre-pandemic levels, but the employment rate of highly educated women has rapidly recovered, rising by 2.5 percentage points compared to before the pandemic. This contrasts with men, whose employment rates among the highly educated have declined. In particular, employment in non-face-to-face service industries (information and communication, professional, scientific, and technical services) and health and welfare?sectors with a high proportion of women in their 20s and 30s?has significantly increased. The report analyzes that this reflects changes in labor demand by industry following digital transformation after the pandemic.

By marital status, married women have recovered faster than unmarried women. In the first half of 2020, during the early pandemic, labor supply among married women with heavy childcare burdens sharply declined due to the closure of childcare facilities. However, since then, employment among married women has recovered more quickly than among unmarried women. The expansion of flexible work arrangements such as telecommuting during COVID-19 improved the environment for married women to balance work, household chores, and childcare. Additionally, increased participation of men in childcare has fostered a culture of shared spousal caregiving, which is believed to have contributed to this trend. A similar pattern of a sharper initial decline followed by a faster recovery in female labor supply has also been observed in the United States.

Oh Sam-il, Deputy Director of the Employment Analysis Team at the Bank of Korea's Research Department, emphasized, "The recent female employment recovery can be interpreted as a continuation of the trend of gradual increase that existed before the pandemic," adding, "If labor market participation among women in their 20s and 30s, highly educated women, and married women continues to expand, it will lead to quantitative and qualitative growth in labor supply in the medium to long term, positively impacting potential growth rates."

Meanwhile, despite an overall increase in female labor supply by age group over the past decade, the M-curve phenomenon has not significantly improved, and there remains considerable room for improvement to reach the levels of major advanced countries. The M-curve phenomenon refers to the pattern where female economic activity participation declines in their 30s during marriage, pregnancy, and childcare periods, then rises again in their 40s. In Korea, over the past decade, the M-curve has shifted slightly to the right as labor supply among women in their early 30s increased due to trends of remaining unmarried and late marriage.

Deputy Director Oh stated, "While the female labor force participation rate by age in the Euro area remains relatively stable around the 30s, Korea still shows a decline during the 30s, which is the period of marriage, pregnancy, and childcare," and added, "To ensure that the increase in female employment during the pandemic recovery is not just a temporary phenomenon, continuous policy support is needed to expand the culture of shared spousal caregiving and flexible work arrangements."