The impact of the Covid-19 pandemic on gender labor market asymmetries in Germany

Abstract

The Corona pandemic affected life and working conditions around the world. Some could work from home, some had to risk their lives at the workplace, and some got laid off. The selection of employees to one of these groups, however, was asymmetric about gender. More than 63 percent of employees providing services in Germany are female; females in health professions account for more than 75 percent, and in social professions, including daycare, the share of female employees is at 84 percent. These occupations were in high demand during the pandemic and cannot be practiced at home. Since women do more than 62 percent of housework and childcare, the high demand for female work creates a dilemma. While family obligations increased as childcare facilities and schools closed, women had to decide whether to remain or drop out of the labor market. In this paper’s estimated DSGE model, these choices are addressed by allowing for asymmetries in participation decisions and disutility of effort for male and female workers. While at the beginning of the pandemic, female employment increased relative to male, an increase in disutility drove females out of the labor market during the second lockdown. Instead, predominantly males entered, and females reacted to this increase by staying absent. This pattern resembles previous findings on historical pandemics and, in the literature, is called “the added worker effect.”