Gender and the Business Cycle: A Stocks and Flows Analysis of US and UK Labour Market States

In this paper we combine an analysis of all labour market stocks and flows to assess gender gaps during periods of economic recessions and booms in oth the US and the UK. Starting from an improved understanding of the relationship between gender and the business cycle, we analyse three important and related gender issues: how the fluidity of the labour market explains the way gender gaps in population rates behave during economic cycles, whether the well-known stock-flow fallacy in the importance of cyclical differences in participation extends to gender patterns, and the potential presence of the added worker effect at the aggregate level during the latest Great Recession. We find that, for the UK in particular, flows reveal more prevalent gender differences in participation over the cycle than an analysis of stocks would imply. This is consistent with a female specific added worker effect in the UK, which is not present in the US.