'Shecession': How women are more impacted by economic downturns

Whenever a recession hits the world economy, women have found themselves at the centre of a distinct struggle, facing various obstacles unique to their gender. As economic pressures intensified, wage disparities widened, and access to opportunities dwindled.

A recession is an economic downturn with reduced economic activity, lower GDP, higher unemployment, and less spending and investment. Various factors can cause it and have adverse effects on businesses, jobs, and overall economic growth.

The ongoing global economic downturn is having a notable impact on women. According to research conducted by the International Labour Organisation, women on an average earn 20 per cent less than men, although this figure varies considerably across different countries.

Moreover, a recent Bankrate survey revealed that 74 per cent of women are more concerned about the potential economic downturn as compared to 65 per centof men. This is due to the disparities between the two genders in preparing for an economic downturn.

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Despite some progress in recent years, it is common knowledge that women still confront greater financial vulnerability than men. Persistent gender pay gap, particularly for women of colour and mothers, adversely affects their capacity to accumulate wealth. This inequality also poses a challenge to their ability to manage debt, ranging from credit card balances to student loans.

"Recession affects labour markets. Lack of skilling and mobility constraints can delay the process of women reentering the labour markets once they lose jobs due to recession," said NIPFP professor and economist Lekha S. Chakraborty.

Recessions' Dual Consequences for Women

In times of economic downturn, men and women encounter distinct economic difficulties due to a range of factors.

"Men and women are at asymmetric levels of socio-economic development. The key factors that can widen the disparity are the differentials in access and utilisation of education, health, and wage and workforce participation," said Lekha.

In times of uncertainty, women tend to have more caregiving responsibilities, which can hinder their ability to work full-time. Moreover, the existing gender pay gap exacerbates the situation since women are already paid less than men even before a recession hits.

Consequently, economic downturns can have a disproportionate impact on women, leading to what is known as a "shecession" -- economic recessionthat impacts women more than men.

Care Economy Gap: Fueling Gender Disparities

"Lack of care economy infrastructure is a significant factor that led to gender differentials," stated Lekha Chakraborty.

Care economy includes those activities that address the physical, psychological, and emotional needs of adults, children, the elderly, the young, the frail, and the physically fit.

The lack of a care economy has resulted in insufficient support systems for childcare, eldercare, and domestic responsibilities, which disproportionately affect women's economic situation.

As a consequence, this sustains the cycle of gender inequality, hindering their professional growth and financial independence. It is imperative to address the care economy gap to create a more equitable society that allows both men and women to fully participate in the workforce while fulfilling important caregiving responsibilities.

Crisis Ripple Effect: Women's Excess Burden in Recessions

The impact of a crisis is extensive, and women often shoulder a disproportionate amount of added responsibilities during times of economic hardship. The effects of these difficulties can have long-lasting consequences on the lives of women.

Lekha said that recession affects the government's fiscal space, which has a major consequence on the well-being of women.

"If the government reduces health budgets during a recession, the care economy burden of women will increase as the decreased days of hospitalisation is compensated by the care providers at home. The dual work burden of women increases in recession as there are fewer options for market-based services in the care sector during recessions," she said.

"The violence against women increases during recessions, and the role of the state machinery to support women from violence is significant," she added.