Bank of Korea: "Post-COVID Female Employment Hit Harder Due to Service Sector Contraction and Childcare Burden"

[Asia Economy Reporter Kim Eun-byeol] An analysis has emerged showing that women's employment has been more severely impacted than men's due to the COVID-19 pandemic. This is attributed to the contraction of face-to-face service industries, where many women are employed, and the closure of childcare and educational institutions, which increased childcare burdens.

According to the report titled "COVID-19 and Female Employment: Pandemic vs. Typical Economic Recession Comparison" released by the Bank of Korea on the 6th, the monthly number of employed women decreased by as much as 5.4% (January 2021) compared to before COVID-19 (February 2020).

In contrast, the decrease in the number of employed men was up to 2.4% (January 2021), about half the level of women. Over the one year following COVID-19, the female employment rate dropped 0.9 percentage points more than the male employment rate, while the unemployment rate rose 1.7 percentage points higher for women than men.

The Bank of Korea stated in the report, "The recent deterioration in female employment is somewhat unusual compared to past typical economic recessions, during which male employment was more severely affected."

Indeed, during the 1997 Asian financial crisis, the decline in male employment rate was 1.5 percentage points greater than that of females, and the increase in male unemployment rate exceeded females by 1.7 percentage points. Similarly, during the 2008 financial crisis, the male employment rate decline and unemployment rate increase were 1.1 and 0.1 percentage points higher than those of females, respectively.

The Bank of Korea cited as a background to this phenomenon that the COVID-19 shock was concentrated in industries with a high proportion of female workers. Industries such as other services (50% female), wholesale and retail, accommodation and food services (52%), education (67%), and health, social, and welfare services (81%) have high female employment ratios. Due to social distancing measures after COVID-19, face-to-face services in these sectors contracted, inevitably leading to a significant decrease in the number of employed workers.

Another factor identified was the increased childcare burden on employed individuals due to the closure of schools and daycare centers as part of COVID-19 prevention measures. Among the decrease in employed women aged 30 to 45 over one year after the pandemic, married women accounted for 95.4% of the contribution, while unmarried women accounted for only 4.6%. The Bank of Korea estimated, "Since childcare is generally more heavily shared by women than men, the increased childcare burden after COVID-19 was likely largely transferred to women."

Looking ahead, COVID-19 is expected to have both positive and negative effects on female employment. The Bank of Korea's analysis suggests that if discussions on sharing childcare and economic activities between spouses increase and a 'couple co-care' culture spreads, female employment rates could rise. Changes in working conditions due to COVID-19, such as the expansion of telecommuting and flexible work arrangements, are also expected to support women's participation in economic activities.

However, the Bank of Korea advised, "As some of the female jobs lost due to COVID-19 may be replaced by 'automation,' it might be difficult to restore employment levels to those before the pandemic. Since women's career interruptions could lead to a long-term decline in potential growth rates, policy support is necessary to promote the spread of couple co-care culture and the expansion of flexible work systems."

This content was produced with the assistance of AI translation services.