## IMF | Gender Note NOTE/2024/001 — Gender and Business Cycles

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### Are business cycles gender neutral?
- Business cycles are not gender neutral.
- Key cross-cutting finding:
  - Women’s unemployment is significantly less exposed to business cycles than men’s in advanced economies (AEs).
  - No significant gender differences in unemployment cyclicality in emerging markets and developing economies (EMDEs).
  - The gender differential in unemployment cyclicality weakened during the COVID-19 crisis relative to other bad economic states.

### Unemployment, employment, and participation
- Evidence and samples:
  - An, Bluedorn, and Ciminelli (2022) samples: AEs = 38 countries; EMDEs = 57 countries.
  - Young and adult women in AEs have lower unemployment gap sensitivity to the output gap than men.
  - In EMDEs, cyclical sensitivities of unemployment are similar for men and women within each age group.
- Magnitudes and decompositions (AEs examples):
  - Participation cyclicality: men higher by 8 (young) and 5 (adult) percentage points than women.
  - Employment cyclicality: men higher by 23 (young) and 13 (adult) percentage points than women.
- Asymmetry across business cycle phases (AEs):
  - Negative output gap impact stronger for men.
  - Young (adult) men’s unemployment gap is 29 (13) percentage points more exposed to output gap in bad times than in good times.
- COVID-19 specifics (AEs):
  - Relationship between unemployment gap and output gap was much weaker during COVID-19 than in other bad states.
  - Adult men’s sensitivity: 4 percentage points more negative than women’s during COVID-19 vs 13 percentage points in other bad states.
  - Young people: men were 24 percentage points more exposed in other bad times, whereas during the pandemic women were 2 percentage points more negatively exposed.

### Income risk and hours worked
- Income risk (Guvenen, Pistaferri, and Violante 2022):
  - Sample: a group of 13 AEs and EMDEs.
  - Income shocks become more negatively skewed in recessions; effects are more pronounced for men than for women.
  - Conclusion: women’s income risk is significantly less sensitive to business cycles than men’s.
- Hours worked (United States):
  - Men’s business cycle volatility of hours worked is consistently higher than women’s (Albanesi 2020; Guisinger 2020).
  - Results hold across filtering methods for the sample 1979:Q3 to 2012:Q2.

### Monetary and fiscal policy shocks
- Monetary policy (Flamini and others 2023; panel of 22 AEs and EMDEs):
  - An unexpected increase of 100 basis points in the interest rate narrows the total gender employment gap starting around 10 quarters after the shock, with a peak impact of about 0.3 percentage point.
  - Employment effects decomposed: short-term decline (narrowing) in the unemployment gender gap and medium-term increase (narrowing) in the labor force participation gender gap.
  - Asymmetry by sign:
    - Positive shocks (tightening) narrow the gender employment gap more than negative shocks.
    - Narrowing by more than 0.4 percentage point eight quarters after a positive shock, peaking at 0.6 percentage point after 11 quarters.
    - Negative shocks yield no significant effects on the gender employment gap.
- Fiscal policy (Akitoby, Honda, and Miyamoto 2019; G7 countries):
  - During recessions, a positive spending shock of 1 percent of GDP would, on average, lift female employment by 1 percent at peak and increase male employment by 0.6 percent.
  - Labor force effects for the same shock: women’s labor force +0.2 percent at peak; men’s labor force +0.1 percent (results for four countries not statistically significant).
  - Heterogeneity: favorable employment outcome for women prevalent across G7 except Germany.
- Inflation vulnerability:
  - Women are more vulnerable to inflation because they are more likely to work in low-paying jobs and have restricted access to financial services; inflation disproportionately affects the poor reliant on wage income, welfare benefits, and pensions.

### Mechanisms accounting for gendered differences
- Sectoral composition:
  - Men concentrated in cyclical sectors (manufacturing, construction); women concentrated in less cyclical sectors (health care, education, public sector).
- Firm size:
  - Women more likely to work in smaller firms, which exhibit lower employment cyclicality than larger firms.
- Part-time and flexible work:
  - OECD data (as of data extracted on March 4, 2024): women 24 percent, men 9.6 percent.
  - Women are, on average, 2.5 times more likely than men to engage in part-time employment.
  - Part-time employment tends to be countercyclical and drives cyclical variation in hours worked.
- Gender wage gap:
  - Lower average wages for women may make them more retainable during downturns as employers minimize labor costs.
- Household responses — added worker effect:
  - Married women often enter the workforce when husbands become unemployed, acting as household insurance and moderating women’s employment cyclicality.
- EMDE-specific factors:
  - Larger agricultural labor share (less cyclical) and larger informal sectors can yield more gender-neutral cycle exposure.
  - Less developed social safety nets and budgetary capacity can lead to more balanced male–female labor force involvement in EMDEs.

### Prospects and policy considerations
- Near-term economic context:
  - Slow recovery from the pandemic, Russia’s invasion of Ukraine, cost-of-living crises, unprecedented tightening of global monetary conditions to combat decades-high inflation.
  - Short- to medium-term environment: low growth, shock-prone conditions, limited policy space, record-high debt levels, higher-for-longer interest rates, growth prospects weakest in two decades.
- Implications:
  - Women’s roles in less cyclical sectors may yield more stable labor market attachment relative to men, potentially reducing gender inequalities in the short to medium term for unintended reasons.
  - Stability of women’s jobs may stabilize household resources during shocks.
- Policy recommendations:
  - Preserve countercyclical fiscal policy’s primary aim of managing aggregate demand while recognizing gender implications.
  - Design structural reforms explicitly to enhance female labor force participation.
  - Targeted measures:
    - Temporary tax relief or subsidies tailored to sectors heavily affected by downturns (manufacturing, construction) to maximize employment retention.
    - Government-funded training and reskilling programs to help workers transition from declining to emerging sectors.
    - Short-time work programs (e.g., Kurzarbeit) to reduce layoffs by reducing hours with government income compensation.
    - Cross-cutting policies: enhance unemployment insurance, provide childcare support, and promote flexible work arrangements to bolster participation and stability.
- Scarring effects:
  - Mixed evidence on long-term scarring by gender:
    - von Wachter (2020): no clear differences between genders in adverse impact of labor market conditions at entry (mostly AEs).
    - Berniell and others (2023): in Latin America, women entering the labor market during high unemployment periods tend to outperform male counterparts.
  - Scarring and long-term gendered implications remain areas for future work.

*IMF | Gender Note NOTE/2024/001 — Gender and Business Cycles; Diego B. P. Gomes; April 2024*

### Introduction ...........................................................................................................

### Introduction

### Are Business Cycles Gender Neutral?
- Reviews literature documenting nuanced patterns that challenge the notion of gender neutrality in economic fluctuations.
- Key finding: Women’s unemployment is significantly less exposed to business cycles than men’s in advanced economies (AEs).
- Key finding: No significant differences in cyclical exposure of unemployment between men and women in emerging markets and developing economies (EMDEs).
- The gender differential in cyclical sensitivity of unemployment weakened during the COVID-19 crisis when compared with other past bad economic states.

### Unemployment, Employment, and Participation
- Women’s unemployment is significantly less exposed to business cycles than men’s in AEs.
- No significant gender differences in unemployment cyclicality in EMDEs.
- The gendered pattern in unemployment cyclicality was attenuated during the COVID-19 episode relative to other bad states.
- Men’s employment is more susceptible to monetary policy shocks in a group of AEs and EMDEs (see Monetary and Fiscal Policy Shocks section).

### Income Risk and Hours Worked
- Women’s income risk is less sensitive to business cycles in a group of AEs and EMDEs.
- In the United States, women’s hours worked are less sensitive to business cycles compared with men’s.

### Monetary and Fiscal Policy Shocks
- Men’s employment responds more strongly to monetary policy shocks in a group of AEs and EMDEs.
- Positive fiscal spending shocks during recessions favor women’s employment in the G7 countries, although the effects of fiscal shocks vary by country.
- Impulse-response patterns differ by sign of monetary policy shock and by state of the business cycle (good vs bad times).

### What Mechanisms Account for These Differences?
- Important channels identified include:
  - Sectoral employment composition.
  - Firm-size variations.
  - Composition of part-time and flexible work arrangements.
  - Gender wage gaps.
  - Household dynamics.

### Prospects and Policy Considerations
- As the global economy faces low growth, limited policy space, and heightened uncertainty, policymakers must incorporate gendered business-cycle dynamics.
- Policy design should be targeted and country-specific to address the unique challenges men and women face during economic fluctuations.

*IMF | Gender Note NOTE/2024/001 — Gender and Business Cycles; Diego B. P. Gomes; April 2024*

### Introduction

### Introduction

### Overview
- Business cycles affect men and women differently across unemployment, income risk, hours worked, and responses to monetary and fiscal policy shocks.
- This note: reviews literature on gender-differentiated effects of business cycles; discusses mechanisms; places findings in the current and projected economic environment; concludes with policy considerations.

### Key findings on gendered cyclicality
- Women’s unemployment in AEs is generally less vulnerable to business cycles compared with men’s; no significant differences in EMDEs.
- Women’s income risk is less sensitive to business cycles than men’s in a group of AEs and EMDEs.
- Women’s hours worked in the United States show lower business cycle volatility than men’s.
- Men’s employment is more exposed to monetary policy shocks across a panel of 22 AEs and EMDEs.
- Positive fiscal spending shocks during recessions tend to benefit women’s employment in the G7, though effects vary by country.

### Are Business Cycles Gender Neutral?
- Business cycles are not gender neutral.
- The note documents cyclical sensitivity across:
  - unemployment,
  - employment,
  - labor force participation,
  - income risk (skewness of one-year income change distribution),
  - hours worked,
  - effects of monetary and fiscal policy shocks,
  - inflation vulnerability.

### Unemployment, Employment, and Participation
- Evidence from An, Bluedorn, and Ciminelli (2022):
  - Advanced economies (AEs) sample: 38 countries; Emerging markets and developing economies (EMDEs) sample: 57 countries.
  - Young and adult women in AEs have lower unemployment gap sensitivity to the output gap than men.
  - Young men in AEs display a sensitivity about three times larger in absolute value than that of adult women.
  - In EMDEs, cyclical sensitivities of unemployment are similar for men and women within each age group.
- Decomposition:
  - Women’s lower unemployment cyclicality in AEs is mostly driven by lower employment cyclicality, with slight influence from labor force participation.
  - Example magnitudes (AEs): for young (adult) people, participation cyclicality for men is 8 (5) percentage points higher than for women, whereas employment cyclicality is 23 (13) percentage points higher.
- Asymmetry across business cycle phases:
  - Negative output gap (bad times) impact is stronger for men in AEs.
  - Young (adult) men’s unemployment gap in AEs is 29 (13) percentage points more exposed to output gap in bad times than in good times.
- COVID-19 pandemic:
  - The relationship between unemployment gap and output gap was much weaker during the COVID-19 crisis than during other bad economic states (statistically different in AEs).
  - Gender gaps in unemployment sensitivity were smaller during the pandemic: e.g., adult men’s sensitivity in AEs was 4 percentage points more negative than women’s during COVID-19 versus 13 percentage points in other bad states; for young people, men were 24 percentage points more exposed in other bad times, whereas during the pandemic women were 2 percentage points more negatively exposed.

### Income Risk and Hours Worked
- Income risk (Guvenen, Pistaferri, and Violante 2022):
  - Sample: a group of 13 AEs and EMDEs.
  - Income shocks become more negatively skewed in recessions; these effects are more pronounced for men than for women.
  - Conclusion: women’s income risk is significantly less sensitive to business cycles than men’s.
- Hours worked (United States evidence):
  - Men’s business cycle volatility of hours worked is consistently higher than women’s (Albanesi 2020; Guisinger 2020).
  - Results hold across filtering methods (HP, Baxter-King BP, unobserved components) for the sample 1979:Q3 to 2012:Q2.

### Monetary and Fiscal Policy Shocks
- Monetary policy (Flamini and others 2023; panel of 22 AEs and EMDEs):
  - An unexpected increase of 100 basis points in the interest rate narrows the total gender employment gap starting around 10 quarters after the shock, with a peak impact of about 0.3 percentage point.
  - Employment effects are driven by a short-term decline (narrowing) in the unemployment gender gap and a medium-term increase (narrowing) in the labor force participation gender gap.
  - Asymmetry by sign of shock:
    - Positive shocks (tightening) narrow the gender employment gap more than negative shocks.
    - Narrowing by more than 0.4 percentage point eight quarters after a positive shock, peaking at 0.6 percentage point after 11 quarters.
    - Negative shocks yield no significant effects on the gender employment gap.
- Fiscal policy (Akitoby, Honda, and Miyamoto 2019; G7 countries):
  - During recessions, a positive spending shock of 1 percent of GDP would, on average, lift female employment by 1 percent at peak and increase male employment by 0.6 percent.
  - Labor force effects: similar shock would increase women’s labor force by 0.2 percent at peak and men’s by 0.1 percent (results of four countries statistically not significant).
  - Effect heterogeneity: favorable employment outcome for women is prevalent in all G7 countries except Germany.
- Inflation vulnerability:
  - Women are more vulnerable to inflation than men because they are more likely to work in low-paying jobs and have restricted access to financial services.
  - Inflation disproportionately affects the poor who are more reliant on wage income, welfare benefits, and pensions and have less access to interest-bearing accounts or asset holdings.

### Mechanisms Explaining Gendered Business Cycles
- Sectoral composition:
  - Men are more concentrated in cyclical sectors (manufacturing, construction) that are sensitive to downturns and interest rate risk.
  - Women are more concentrated in less cyclical sectors (health care, education, public sector).
  - Sectoral segregation helps explain gender disparities in employment, income risk, hours worked, and responses to monetary and fiscal shocks.
- Firm size:
  - Women are more likely to work in smaller firms, which exhibit lower cyclicality in employment than larger firms.
- Part-time and flexible work:
  - OECD data: women are, on average, 2.5 times more likely than men to engage in part-time employment.
  - Average shares (OECD.Stat as of data extracted on March 4, 2024): women 24 percent, men 9.6 percent.
  - Part-time employment tends to be countercyclical; shifts between full-time and part-time drive cyclical variation in hours worked.
- Gender wage gap:
  - Women earn lower wages on average, which may make them more retainable during downturns as employers minimize labor costs.
  - Evidence: recessions disproportionately affect high-wage workers due to high cyclicality of separations (Mueller 2017).
- Household responses — "added worker effect":
  - Married women often enter the workforce when husbands become unemployed, acting as household insurance and moderating women’s employment cyclicality.
  - If the added worker effect did not exist, married women’s employment would be as volatile as men’s and display negative skewness.
- EMDE-specific factors:
  - Greater labor share in agriculture (less cyclical) and a larger informal sector can produce more gender-neutral cycle exposure.
  - Less developed social safety nets and budgetary capacity can lead to more balanced labor force involvement of men and women in EMDEs.

### Prospects and Policy Considerations
- Near-term global outlook: slow recovery from the pandemic, Russia’s invasion of Ukraine, and cost-of-living crises; unprecedented tightening of global monetary conditions to combat decades-high inflation; growth slow and uneven (IMF 2023).
- Short- to medium-term environment: low growth, shock-prone conditions, limited policy space, record-high debt levels, higher-for-longer interest rates, growth prospects weakest in two decades.
- Implications:
  - Women’s roles in less cyclical sectors may yield more stable labor market attachment relative to men, potentially reducing gender inequalities in the short to medium term for unintended reasons.
  - Stability of women’s jobs may act as a stabilizing force for household resources during shocks.
- Policy recommendations and considerations:
  - Preserve the primary aim of countercyclical fiscal policy: manage aggregate demand, while recognizing gender implications.
  - Structural reforms are crucial to spur long-term growth and can be designed to explicitly enhance female labor force participation (Asai and others 2023; Budina and others 2023).
  - Targeted measures:
    - Temporary tax relief or subsidies tailored to sectors heavily affected by downturns (manufacturing, construction) to maximize employment retention.
    - Government-funded training and reskilling programs to help workers transition from declining to emerging sectors.
    - Short-time work programs (e.g., Kurzarbeit) to reduce layoffs by reducing hours with government income compensation.
    - Cross-cutting policies: enhance unemployment insurance, provide childcare support, and promote flexible work arrangements to bolster participation and stability.
- Scarring effects:
  - Mixed evidence on long-term scarring by gender.
    - von Wachter (2020): no clear differences between genders in adverse impact of labor market conditions at entry (mostly AEs).
    - Berniell and others (2023): in Latin America, women entering the labor market during high unemployment periods tend to outperform male counterparts.
  - Scarring and long-term gendered implications left for future work.

*IMF | Gender Note — Introduction.*

### References

### References

### Key topics covered in the references
- Countercyclical fiscal policy and gender employment.
- Changing business cycles and the role of women’s employment.
- The gender unemployment gap.
- Okun’s Law, development, demographics, and differences in cyclical sensitivities of unemployment across economy and worker groups.
- Structural fiscal policy effects on female labor force participation in OECD countries.
- Cohort effects and gender differences in initial labor market conditions.
- Part-time employment dynamics in recessions and employment adjustment.
- The added worker effect and spouse labor supply responses.
- Structural reforms to accelerate growth, ease policy trade-offs, and support green transitions in EMDEs.
- Skewed idiosyncratic income risk over the business cycle and sources/insurance.
- Monetary policy and labor market gender gaps.
- Sectoral differences in Okun’s Law and cross-country cyclical differences.
- Volatility of work hours and labor demand by gender.
- Global trends in income inequality and income dynamics (GRID).
- Age- and gender-specific unemployment analyses using Okun’s framework.
- Persistent effects of initial labor market conditions for young adults.
- Gender equality in public sector employment.

### Methodologies and publication types represented
- IMF Working Papers (examples: IMF Working Paper 19/004; IMF Working Paper 23/186; IMF Working Paper 23/211).
- NBER Working Paper (NBER Working Paper 25655).
- Journal articles across fields including Review of Economic Dynamics, Applied Economics, American Economic Journal: Macroeconomics, ILR Review, Journal of Macroeconomics, Economic Modelling, Comparative Economic Studies, Pacific Economic Review, Journal of Economic Perspectives, Economics Letters, Empirica, Quantitative Economics.
- Bank and policy institution working papers (Banco de España Working Paper 2113).
- Staff Discussion Note (IMF Staff Discussion Note 23/007).
- Edited volumes (e.g., Inflation in Emerging and Developing Economies: Evolution, Drivers, and Policies; World Bank Publications).
- IZA World of Labor and IZA Journal of Labor Economics contributions.
- Empirical analyses using sectoral, age-cohort, gender, and firm-size decompositions.

### Geographic and sectoral coverage evident from the references
- G-7 countries.
- OECD countries.
- Latin America.
- United States and United Kingdom comparisons.
- Scandinavian countries.
- South Korea.
- Italy.
- Emerging Market and Developing Economies (EMDEs).
- Cross-country comparisons and global analyses.

### Representative papers and exact bibliographic details (selected from the list)
- Akitoby, Bernardin, Jiro Honda, and Hiroaki Miyamoto. 2019. “Countercyclical Fiscal Policy and Gender Employment: Evidence from the G-7 Countries.” IMF Working Paper 19/004, International Monetary Fund, Washington, DC.
- Albanesi, Stefania. (2020). “Changing Business Cycles: The Role of Women’s Employment.” NBER Working Paper 25655, National Bureau of Economic Research, Cambridge, MA.
- Albanesi, Stefania, and Aysegul Şahin. 2018. “The Gender Unemployment Gap.” Review of Economic Dynamics 30, 47–67.
- An, Zidong, John Bluedorn, and Gabriele Ciminelli. 2022. “Okun’s Law, Development, and Demographics: Differences in the Cyclical Sensitivities of Unemployment Across Economy and Worker Groups.” Applied Economics 54 (36): 4227–39.
- Asai, Miyoko, Qiaoe Chen, Jiro Honda, Xingwei Hu, and Qianqian Zhang. 2023. “The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries.” IMF Working Paper 23/186, International Monetary Fund, Washington, DC.
- Berniell, Inés, Leonardo Gasparini, Mariana Marchionni, and Mariana Viollaz. 2023. “Lucky Women in Unlucky Cohorts: Gender Differences in the Effects of Initial Labor Market Conditions in Latin America.” Journal of Development Economics 161, 103042.
- Borowczyk-Martins, Daniel. 2017. “Why Does Part-Time Employment Increase in Recessions?” IZA World of Labor. doi: 10.15185/izawol.397.
- Borowczyk-Martins, Daniel, and Etienne Lalé. 2019. “Employment Adjustment and Part-Time Work: Lessons from the United States and the United Kingdom.” American Economic Journal: Macroeconomics 11 (1): 389–435.
- Budina, Nina, Christian H. Ebeke, Florence Jaumotte, Andrea Medici, Augustus J. Panton, Marina Mendes Tavares, and Bella Yao. 2023. “Structural Reforms to Accelerate Growth, Ease Policy Trade-Offs, and Support the Green Transition in Emerging Market and Developing Economies.” IMF Staff Discussion Note 23/007, International Monetary Fund, Washington, DC.
- Busch, Christopher, David Domeij, Faith Guvenen, and Rocio Madera. 2022. “Skewed Idiosyncratic Income Risk over the Business Cycle: Sources and Insurance.” American Economic Journal: Macroeconomics 14 (2): 207–42.
- Flamini, Valentina, Diego B. P. Gomes, Bihong Huang, Lisa L. Kolovich, Aina Puig, and Aleksandra Zdzienicka. 2023. “Monetary Policy and Labor Market Gender Gaps.” IMF Working Paper 23/211, International Monetary Fund, Washington, DC.
- Guisinger, Amy Y. 2020. “Gender Differences in the Volatility of Work Hours and Labor Demand.” Journal of Macroeconomics 66: 103254.
- Guvenen, Faith, Luigi Pistaferri, and Giovanni L. Violante. 2022. “Global Trends in Income Inequality and Income Dynamics: New Insights from GRID.” Quantitative Economics 13 (4): 1321–60.
- International Monetary Fund (IMF). 2023. World Economic Outlook: Navigating Global Divergences. Washington, DC, October.
- Moscarini, Giuseppe, and Fabien Postel-Vinay. 2012. “The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment.” American Economic Review 102 (6): 2509–39.
- von Wachter, Till. 2020. “The Persistent Effects of Initial Labor Market Conditions for Young Adults and Their Sources.” Journal of Economic Perspectives 34 (4): 168–94.
- Zanin, Luca. 2014. “On Okun’s Law in OECD Countries: An Analysis by Age Cohorts.” Economics Letters 125 (2): 243–48.
- Zanin, Luca. 2018. “The Pyramid of Okun’s Coefficient for Italy.” Empirica 45 (1): 17–28.

*References list from the original content unit.*

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_Source: https://www.imf.org/-/media/files/publications/gns/2024/english/gnsea2024001.pdf_