COVID-19 Job Losses Put Women’s Financial Security At Risk

The COVID-19 pandemic, which began disrupting global economies in early 2020, inflicted disproportionate harm on women’s employment, exacerbating longstanding gender inequalities in the labor market and threatening long-term financial stability for millions. As of early 2025, while overall employment has rebounded in many regions, women continue to face elevated risks of underemployment, wage stagnation, and diminished retirement prospects, according to analyses from the International Labour Organization and the Institute for Women’s Policy Research. This uneven recovery underscores how initial job losses in female-dominated sectors like hospitality and retail have cascaded into broader economic vulnerabilities, particularly for mothers and women of color. Governments and businesses worldwide are now grappling with the imperative to implement targeted interventions to mitigate these effects and foster inclusive growth.

In the United States, for instance, women accounted for 86.3 percent of the 227,000 jobs lost in December 2020 alone, with a total of 2.5 million women exiting the labor force by early 2021 compared to 1.8 million men. By January 2025, women’s employment had surpassed pre-pandemic levels by 2.4 million jobs, yet the path to this recovery was 11 months longer than for men, reaching parity only in January 2023. Globally, the International Labour Organization estimates that 13 million fewer women were employed in 2021 than in 2019, with women’s labor force participation lagging due to overrepresentation in hard-hit industries such as accommodation, food services, and manufacturing. These disparities not only strained immediate household finances but also eroded savings and retirement contributions, amplifying the gender wealth gap.

Emerging data from 2024 and 2025 reveal that while some progress has been made—such as increased female representation in higher-paying fields like transportation and construction—the structural barriers persist. In Latin America and the Caribbean, the female labor force participation rate stood at 52.1 percent in 2024, far below men’s 74.3 percent, reflecting insufficient job creation and persistent caregiving burdens. As economies stabilize, the focus shifts to policies that address these imbalances, ensuring women’s reintegration supports broader fiscal health and sustainable development.

The Immediate Toll: Disproportionate Job Losses During the Pandemic

Sectoral Vulnerabilities and Employment Declines

The pandemic’s economic shockwaves hit sectors employing large numbers of women hardest, leading to swift and severe job displacements. In the U.S., women comprised nearly half of entry-level service jobs in food and bar industries, which shed 597,000 positions over two months in late 2020. Globally, women’s overrepresentation in accommodation and food services—where they often hold low-wage, insecure roles—resulted in disproportionate income losses, with 29 percent of working-age mothers losing jobs compared to 20 percent of fathers. This pattern extended to emerging markets, where informal employment, prevalent among women, offered scant protection against shutdowns.

By mid-2020, unemployment rates for women surged by over 12 percentage points in many countries, outpacing men’s increases of less than 10 points. In low-income households, 39 percent reported job losses, with women in frontline roles like healthcare support facing heightened health risks without adequate safeguards. The closure of schools and childcare facilities compounded this, as one in four unemployed women cited caregiving as the primary reason, double the rate for men. These immediate effects disrupted cash flows, forcing many to dip into limited reserves or incur debt.

In developing regions, the impact was acute: in South Asia and sub-Saharan Africa, women’s poverty rose by 3.3 percent due to activity shutdowns, with informal workers—predominantly women—losing livelihoods without social security nets. The International Monetary Fund noted that two-thirds of economies experienced “she-cessions” in early 2020, where women’s employment fell faster than men’s, highlighting how pre-existing occupational segregation amplified the crisis.

Racial and Ethnic Disparities in Job Displacement

Women of color bore the brunt of these losses, with Black and Latina women facing unemployment rates up to twice that of white women in the U.S. by April 2020. In the UK and Canada, 33 percent of laborers—disproportionately women from minority groups—lost half their pay, while in China, the figure reached 45 percent. These groups, often concentrated in essential yet precarious roles, endured higher exposure to infection risks alongside economic precarity.

Latina workers saw full-time employment surge by 5 percent between 2022 and 2023, yet their overall wage gap widened to 51 cents on the dollar compared to white men when including part-time roles. In Europe and the Americas, gender inequalities in labor participation deepened, with women 24 percent more likely to face permanent job loss due to the outbreak. This intersectional burden not only strained family budgets but also perpetuated cycles of financial insecurity across generations.

Recovery efforts have been uneven: while Asian women in the U.S. saw 22.3 percent employment growth by 2025, Black women lagged, with persistent gaps in access to re-skilling programs. Addressing these disparities requires disaggregated data and targeted relief, as evidenced by successful cash transfers in Togo reaching 65 percent women informal workers.

Persistent Gender Gaps in Labor Force Participation

Pre- and Post-Pandemic Trends in Participation Rates

Prior to 2020, global gender gaps in labor force participation hovered at 27 percentage points, with women at 47 percent compared to men’s 74 percent. The pandemic widened this to 68 percent of countries experiencing she-cessions by mid-2020, though by 2024, rates had narrowed in some areas due to economic revival. In the U.S., prime-age women’s participation reached new highs by 2023, yet mothers with children under 12 saw dips, recovering only slightly to 73.7 percent by 2024.

In Latin America, participation stabilized at 52.1 percent for women in 2024, but remained stagnant since 2012, signaling chronic underutilization of female talent. The ILO-UN Women joint analysis underscores how marriage and children exacerbate gaps, with women’s rates dropping post-childbirth while men’s rise. This dynamic, intensified by pandemic childcare closures, led to 11 million girls at risk of permanent school dropout, further entrenching low participation.

Post-2020, flexible work arrangements helped some women re-enter, but burnout from dual burdens—paid work and unpaid care—deterred others. In advanced economies, women’s participation in male-dominated fields like construction grew by 194,000 jobs by 2025, yet overall segregation indices worsened for parents, at 0.52 in 2024.

Caregiving Burdens and Their Labor Market Effects

Women shouldered the majority of unpaid care, with one-quarter of unemployed women citing childcare lacks as the cause, versus one-eighth for men. Globally, this invisible load increased by 10-20 percent during lockdowns, pushing many out of formal employment. In the U.S., single mothers were twice as likely to exit work due to disruptions, with 20 percent still affected by November 2020.

Men increased caregiving slightly post-pandemic, but women retained 60-70 percent of responsibilities, straining mental health and productivity. The ILO highlights that without universal social protection, these burdens reduce women’s bargaining power, perpetuating low-wage traps. In emerging markets, rural women faced compounded effects from agricultural disruptions and family duties.

Policy responses like expanded parental leave in G7 countries aim to balance loads, but implementation lags. By 2025, only 45 percent of economies offered comprehensive care policies, leaving gaps that hinder full participation.

• Childcare Closures and Maternal Exit: School shutdowns forced 29 percent of mothers into unemployment, compared to 20 percent of fathers, as women absorbed remote learning demands. This led to reduced work hours for 23 percent of employed women, versus 16 percent of men, eroding immediate earnings and future promotions. Long-term, such interruptions cost women three to four times their annual salary in lost wages and benefits over a career.
• Unpaid Care Work Surge: Women’s daily unpaid labor rose by 1-2 hours globally, equivalent to 18.1 billion additional hours weekly during peaks. This exhaustion contributed to 25 percent of women considering workforce exit, per McKinsey surveys, amplifying mental health strains and delaying economic re-entry. Investments in care infrastructure could reclaim $64.5 billion annually in U.S. maternal productivity alone.
• Essential Worker Risks: Comprising 70 percent of health responders, women faced infection rates 1.6 times higher without proportional relief access. In countries with gender-targeted policies, women were 1.6 times more likely to receive aid, yet only 30 percent of nations implemented such measures by 2024. This exposure deterred participation, with 40 percent of frontline women reporting health-related absences.
• Informal Sector Vulnerabilities: Women in informal roles—60 percent of global female employment—lost 22 percent of business activity in early 2020, lacking benefits. Recovery programs like Togo’s cash grants reached 65 percent women, boosting participation by 15 percent, but scaled poorly elsewhere. Persistent informality widens gaps, with women 24 percent more likely to face permanent loss.
• Digital Divide Barriers: Remote work favored men in tech-heavy fields, while women in low-skill sectors struggled with access; 35 percent of women lacked broadband versus 28 percent of men. Bridging this could add $13 trillion to global GDP by 2030, per McKinsey, yet only 40 percent of recovery funds targeted digital equity for women by 2025.
• Parental Leave Disparities: Fathers took 19,000 days of leave in select countries by 2023, up from pre-pandemic, but mothers claimed 80 percent overall. This imbalance sustains segregation, with maternal participation 20 percent lower post-childbirth. Universal paid leave could equalize rates, reducing the motherhood penalty by 9 percent in earnings.
• Mental Health Toll: 30 percent of women reported daily anxiety from dual roles, versus 22 percent of men, leading to 18 percent lower retention. Support programs in 25 percent of firms improved re-entry by 12 percent, highlighting needs for integrated wellness in recovery strategies.

Financial Repercussions: Wages, Savings, and Debt Accumulation

Wage Gaps and Income Instability

The pandemic accelerated wage disparities, with women’s median earnings stagnating while men’s rose faster in 2023, widening the full-time gap to 83 cents on the dollar—the first annual increase in 20 years. Globally, the health sector’s 28 percent gender pay gap exceeded the 16 percent average, as women in undervalued roles absorbed frontline burdens without commensurate raises. In the U.S., Latinas earned 51 cents to white men’s dollar when part-time included, reflecting re-entry into low-wage sectors.

Income volatility hit hard: 33 percent of U.S. and Canadian women lost half their pay, with similar trends in Europe. Reduced hours—common among 23 percent of women—compounded losses, with one year out costing $400,000 over a career for white women and $1 million for women of color. By 2024, 20 percent of college-educated women struggled with expenses, versus 15 percent of men, underscoring persistent inequities.

Recovery has been tepid: while wages grew universally in 2023, men’s faster pace reverted gaps to 2019 levels. In developing economies, informal women’s earnings fell 45 percent in China, delaying financial stabilization.

Erosion of Savings and Retirement Security

Savings buffers evaporated for many, with 51 percent of U.S. working women reporting negative financial impacts by 2021, and only 41 percent continuing retirement contributions versus 58 percent of men. Emergency funds averaged $2,000 for Millennials and $5,000 for Gen X women, insufficient against prolonged unemployment. By 2025, 18 percent of women saw declined retirement confidence, with gaps in Social Security due to career breaks.

Globally, women’s lower baseline savings—exacerbated by 24 percent higher permanent job loss risk—threatened old-age poverty. In the U.S., unmarried women held under $50,000 in retirement assets, with 31 percent below $1,000. Pandemic withdrawals depleted 401(k)s, with women dipping deeper due to caregiving pauses.

Longevity compounds risks: women need larger nests for extended retirements, yet breaks reduced contributions by 9 percent initially, persisting a decade. By 2025, global GDP shortfalls from inaction reached $5.4 trillion, per McKinsey, as women’s reduced participation curbed growth.

Debt and Household Financial Strain

Debt burdens swelled, with 30 percent of adults worrying daily about levels, women facing higher rates due to essential spending. In the U.S., 52 percent of stimulus recipients—mostly women—used funds for bills, while 22 percent saved. Renters, 43 percent at eviction risk, saw women-headed households overrepresented.

Food insecurity affected one in eight households, with minority women twice as likely. Credit gaps widened: women-owned firms received 36 percent full financing versus 44 percent for men-owned, per 2016 data persisting post-crisis. By 2024, 67 percent finance gaps in male-intensive industries hit women hardest during tight policy.

Household dynamics shifted: financial power imbalances arose as women’s contributions fell, straining relationships. Recovery requires debt relief tailored to women, as unchecked loads perpetuate cycles.

Long-Term Economic Recovery: Progress and Persistent Challenges

Employment Rebound and Sectoral Shifts

By 2025, U.S. women’s employment exceeded 2019 levels by 3.3 percent, with gains in transportation (264,000 jobs) and construction (194,000). Globally, ILO data show narrowing she-cessions, with 45 percent of economies recovering by late 2020. Yet, retail lost 227,000 women’s jobs, and leisure/hospitality 122,000, signaling incomplete sectoral revival.

In Latin America, unemployment fell to 6.1 percent in 2024, but participation lagged pre-2012 trends. Women’s entry into high-pay fields rose, but segregation for parents worsened, with 52 percent needing job changes for parity. Automation and AI threaten low-skill roles, where women cluster, per McKinsey’s 2024 analysis.

Prime-age participation hit records, but minor children depress maternal rates by 20 percent. Flexible policies aided re-entry, yet burnout persists, with 25 percent of women eyeing exits.

Broader Macroeconomic Implications

Women’s setbacks cost global GDP $28 trillion by 2025 if unaddressed, per McKinsey; equitable participation could add $13 trillion. In low-income countries, reducing inequality boosts per capita GDP 25 percent, as in Niger. U.S. maternal hour reductions equate to $64.5 billion annual losses.

Recovery shortfalls: global GDP trails pre-COVID forecasts by $2.5 trillion in 2025, with South Asia 8 percent below. Women’s 13 million job deficit in 2021 slowed aggregate demand, per IMF. Inclusive policies—childcare subsidies, equal pay—yield high returns, reclaiming productivity.

Businesses with female executives see 18-69 percent profitability boosts; diverse hiring enhances resilience. Yet, without intervention, parity delays to 2073.

Global Variations in Recovery Trajectories

Advanced economies saw faster rebounds: U.S. women recovered in three years, versus men’s two. Emerging markets lagged, with 50 percent in she-cessions mid-2020. Africa’s women faced 10 percent hour losses; Asia’s informal sectors 22 percent declines.

Europe’s gaps narrowed post-lockdown, but Americas’ persisted. G7 commitments to care equity aim for 200 million more women by 2025, yet only 45 percent economies offer comprehensive protection. Country-specific tailoring—digital skills in Asia, cash in Africa—accelerates inclusive growth.

Policy Responses and Pathways to Equity

Effective Interventions for Reintegration

Gender-responsive fiscal policies—childcare investments, parental leave—boost participation 1.6 times in aiding countries. U.S. ARPA expanded credits, aiding maternal recovery; India’s transfers reached 200 million women via digital infrastructure. ILO advocates universal protection, closing coverage gaps.

Business competitions and skills training in Africa rebounded women-owned firms 15 percent. Equal pay laws, banning salary history, narrow gaps; prevailing wages in recovery funding ensure quality jobs. Flexible scheduling retains 12 percent more women.

Fintechs drive inclusion: mobile grants in Togo empowered 65 percent women. Global coalitions like Latin America’s target 75 percent apparel women via rights enforcement.

Addressing Structural Barriers

Occupational segregation demands reskilling: McKinsey urges AI-adaptive training for 40 percent at-risk women. Legal reforms—115 countries restrict women’s rights—must end for entrepreneurship. Social protection floors reduce informality’s 60 percent female share.

Mental health integration in workplaces cuts burnout 18 percent. UN Women calls for violence-free environments, as harassment rose 20 percent. Data disaggregation tracks progress, informing targeted aid.

Long-term: secondary education for girls averts 11 million dropouts, boosting lifetime earnings 20 percent. Care economy investments generate jobs, equalizing divisions.

International Commitments and Monitoring

G7’s 2024 Apulia Communiqué pledges care equity; ILO’s 2024 resolution mandates inclusion. Monitoring via ILOSTAT tracks gaps, with 19th ICLS standards enhancing gender data. Annual benchmarks ensure accountability, projecting parity timelines.

Partnerships—governments, firms, NGOs—scale impacts: Women’s World Banking’s fintech focus adds $75 billion revenues by 2025. Sustained funding averts reversals, harnessing women’s $28 trillion GDP potential.

Case Studies: Successes and Lessons from Diverse Contexts

U.S. Maternal Recovery Efforts

ARPA’s child tax credits lifted participation 5 percent for mothers by 2023, yet gaps persist: 20 percent struggle post-recovery. California’s prevailing wages in infrastructure created 15 percent more female jobs. Lessons: integrate equity in stimulus for sustained gains.

Corporate pilots: flexible policies retained 12 percent more women; mentorship programs advanced 81 per 100 men to managers. Challenges: microaggressions unchanged, per McKinsey 2024.

Emerging Market Innovations

Togo’s grants boosted informal women’s earnings 30 percent; Colombia’s relief cut poverty 3.3 percent. India’s digital transfers empowered 200 million, enhancing resilience. Key: sex-disaggregated data for targeting.

In Côte d’Ivoire, oxen provision shifted women’s time to self-employment, increasing incomes 25 percent. Africa’s competitions trained 10,000 women, rebounding firms 15 percent. Barriers: infrastructure lags hinder scaling.

Global North Policy Shifts

Europe’s care leaves equalized roles 10 percent; G7’s 19,000 paternal days signal norms change. U.S. equal pay bans narrowed gaps 2 percent. Monitoring: ILO’s indicators track progress, averting 48-year parity delay.

Asia’s fintechs closed 67 percent finance gaps; Latin America’s coalitions enforced rights in textiles. Cross-learning: blend fiscal, legal reforms for holistic recovery.

Conclusion

The COVID-19 pandemic’s job losses disproportionately burdened women, widening participation gaps to 27 percentage points globally and eroding savings through 24 percent higher permanent displacement risks, as detailed in ILO and World Bank analyses. While 2025 recoveries—U.S. employment up 3.3 percent, Latin America’s unemployment at 6.1 percent—show promise, persistent caregiving loads, 16 percent wage gaps, and $2.5 trillion GDP shortfalls underscore incomplete healing. Racial disparities, with Black and Latina women facing double unemployment, compound financial strains, reducing retirement assets by $400,000 lifetime for many.

Targeted policies—childcare expansions, equal pay enforcement, fintech inclusion—offer pathways, potentially adding $28 trillion to GDP by harnessing women’s talents. Successes in Togo’s grants and U.S. credits demonstrate efficacy, yet structural reforms like universal protection and reskilling are essential to close 48-year parity timelines. Prioritizing women’s security not only rectifies inequities but accelerates resilient, inclusive growth for all.