Drop in working women

WASHINGTON — The trend was clear and consistent. Since the end of World War II and stretching to the start of the current millennium, the percentage of American women entering the labor force rose steadily, at a rate so fast that it offset the steady decline in participation by men.

The influx of fresh workers buoyed economic growth. As companies expanded and demand rose, there were plenty of hands to get the job done.

But women's rush to employment stopped in 2000 and started to decline, as they began to join their male counterparts in retirement, go out on disability and delay paid employment to get more education. Some economists think the high-water mark of female participation in the labor force was in 2000, when it hit 60.3 percent.

"The enormous rise in [the] women's labor-force participation rate was destined to run its course," wrote demographer Cheryl Russell in a recent analysis. "Most women who want or need to work are now in the labor force."

This flattening of the women's rate, combined with a continuing decline in the men's rate, has helped tighten the job market and could slow U.S. economic growth in coming years, economists say.

A paper by four Federal Reserve economists to be published this month by the Brookings Institution puts it this way: The decisions recently of so many Americans to opt out of the work force are "nearly unprecedented in the post-war economic experience" and "seems large and unusually protracted by historical standards."

Contrary to popular theory, Labor Department data do not show a rising proportion of women dropping out of the work force to spend time with their families. Indeed, the participation rate has fallen since 2000 for both women with children and women without children.

While nonworking women are still much more likely than men to cite "home responsibilities" as their reason for not holding or seeking a job, that's actually less true now than it was in the past. The share of women aged 25 to 54, considered to be in their "prime" working years, who gave that reason for not seeking employment has shrunk for more than a decade.

What the data show is that working women are behaving in a similar fashion to men: As the population ages, more workers of both sexes are retiring or being pushed to the sidelines by disability.

"I don't want to work anymore," said Mary Lorenzo, 66, who retired in 2002 after laboring for 31 years at the Sparrows Point steel mill near Baltimore, pouring coal into coke ovens, shoveling mud and repairing electrical equipment. "I really enjoyed it when I was young. ... But when you get older, it gets harder because most of the work is physical."

Now, the female baby boomers who entered the work world in recent decades — often after fighting in court for access to high-paying jobs in mines and factories — are increasingly eligible for private pensions and Social Security disability insurance benefits.

Lorenzo was among the first women hired at the mill in the early 1970s under pressure from the courts, she recalled. Now, she said, "I have it so much better than a lot of women I know" who don't have her retirement income.

Among nonworking adults aged 25 to 54, a growing share of women said they were not holding or seeking a job because of disability or illness, according to the survey data. A shrinking share of comparable men cited those reasons.

Women who once fought to work alongside men are now also subject to layoffs by employers in the steel, textile, automotive, aerospace and similar industries. Many of these middle-age workers are also returning to school temporarily to retrain themselves for new jobs.

Now, without a growing share of female workers to offset the departing men, the national labor-force participation rate dropped to 66.1 percent in May from a peak of 67.3 percent in early 2000.

To appreciate what that difference means: The country's labor force has continued to grow as the population has expanded, but it would have 2.7 million more members today if the rate had rebounded to its high point.

Some analysts say the labor-force participation rate also reflects the lingering effects of the last economic downturn and that it would have rebounded by now if job growth were stronger.

The fact that so many people remain out of the work force reflects "weak labor demand rather than choice," said Jared Bernstein, senior economist at the Economic Policy Institute, a think tank focused on labor issues.

However, behavior can change, making predictions risky.

For example, the share of working men and women over 55 has grown for more than a decade, making this rapidly expanding group a "wild card," the Fed authors wrote.

But Lorenzo won't be looking for another job. "It was sad to leave" the steel mill, she said. But now, she's moving to Las Vegas. "I bought a mobile home in a senior community there. ... I like to play bingo."