Written by Alexander Crawford
Recent data indicates that since the last recession, which saw a re-entry of women into the workforce as husbands were laid off, well-educated women are starting to exit the workforce again in a larger trend seen over the past 20 years. The reason may have to do with the faster-growing salaries of men versus women.
Reuters recently wrote about Susanna Mancini, now 50, who began a career as a lawyer at Citibank and was promoted over the years while giving birth to two children. However, in 2005, she halted her career when her husband's seven-figure salary started to eclipse hers.
"At that point, it was clear that my wage had become family pocket money. There was a real opportunity to do other things that did not require being chained to a desk," said Mancini. (via Reuters)
Stefania Albanesi, a senior economist at the Federal Reserve Bank of New York, is the author of a new study soon to be published, which finds that between 1976 and 1992, there was 2.4% growth of college-educated women in the labor force.
The rise of all women in the work force is estimated to have increased GDP by 42% during 1920 to 1990, says Albanesi.
But from 1993 to 2006, there was a decline of 0.1% per year in college-educated women in the workforce. The result: "the labor force in 2008 had 1.64 million fewer such women than if the growth rate had kept up its earlier trend."
In 1975, male and female college graduates were making 43% more than non-college graduates. By 2008, men were making 92% more while women were making 70% more.
Albanesi gave one of the potential reasons as that described by Susanna Mancini, "In the last 20 years, wages for highly educated males increased so much that they dwarfed the family's second income, usually the one of their wives," said Albanesi.
Although more women returned to the workforce during the 207-2009 recession when their husbands lost their jobs or took pay cuts, Albanesi says to trend appears to be continuing. "Of all working-age women, 58.6% were either working or looking for a job in 2010, down from 59.2% in 2009. The Bureau of Labor Statistics expected the rate to fall further by 2020." (via Reuters)
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.
Business Section: Investing Ideas
This trend appears to be serving as a big headwind for U.S. GDP.
For a look at U.S.-traded companies with female CEOs, which at least symbolically encourage women to work, we compiled a list from Equities.com's top five female CEOs. Use Kapitall tools to dig deeper into these companies' stocks. (Click here to access free, interactive tools to analyze these ideas.)
1. Hewlett-Packard Company (NYSE:HPQ): Offers various products, technologies, software, solutions and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. President and CEO is Meg Whitman.
2. International Business Machines Corp. (NYSE:IBM): Provides information technology (IT) products and services worldwide. President and CEO is Virginia "Ginni" Rometty.
3. Archer Daniels Midland Company (NYSE:ADM): Procures, transports, stores, processes and merchandises agricultural commodities and products in the United States and internationally. Chairwoman and CEO is Patricia A. Woertz.
4. Pepsico, Inc. (NYSE:PEP): Engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. Chairwoman and CEO is Indra K. Nooyi.
5. Kraft Foods Inc. (NYSE:KFT): Manufactures and markets packaged food products worldwide. Chairwoman and CEO is Irene Rosenfeld.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
Disclosure: Kapitall's Alexander Crawford does not own any of the shares mentioned above.