Do More Babies Mean Fewer Working Women?

Like the majority of women nowadays, Ann McPherson joined the labor force after she graduated from college. That was in 1980. She held several jobs, most recently as office manager of a small company in Denver, Martin Marietta Corp., where her husband is a financial analyst. But McPherson, 33, went part-time after her son Drew was born in 1988, then quit entirely after Sean arrived this year. "If women try to have it all, the children suffer," she says. "I'll go back to work maybe in 10 years, after we have a third child."

Women like McPherson are at the core of a new and raging debate. For the first time in decades, women are having more children. At the same time, the number of women entering the labor force has slowed. The debate is over what the two trends mean and whether they are linked.

To Susan Heyward, a senior vice-president at Yankelovich Clancy, Shulman, which surveys American attitudes on basic values, the link is unmistakable. "Women are admitting," she says, "that they need to shift the amount of time they put into their careers." To others, though, the seeming trends are a statistical quirk, exaggerated by a recession that has put women out of work. "We haven't seen anything to prove that women are staying home more," declares Heidi Hartmann, director of the Institute for Women's Policy Research in Washington, D. C.

HIGHER WAGES? A lot is riding on who turns out to be right. Many economists have expected the labor shortages of the late 1980s to resume after the recession. But it's already clear that "labor shortages in the `90s will be different than we thought," says Howard Fullerton, an economist at the Bureau of Labor Statistics who is revising his estimate of how many women will enter the job market through the year 2000. If women stay home in droves, the shortages could be worse than expected. That could drive up wages and make employers scramble to hold down costs or boost productivity.

All of this may depend in part on what's really happening to the so-called fertility rate, which measures the average number of children women have. After hitting 3.7 in 1957, the height of the baby boom, the figure sank like a stone, bottoming out at about 1.8 in the mid-1970s. But recently it has started to rise again. By last year, women of childbearing age had an average of 2.1 kids each, the number at which the population grows instead of shrinks.

Those who think this is just a blip point to differences between generations. Women in their 30s, who put off having children until their careers were on track, are now having children before it's too late. At the same time, some women are having kids earlier, in their 20s. The result could be a "bunching" effect that's driving up the fertility rate. "What's happening is overlapping cohorts having kids simultaneously," says Thomas J. Espenshade, a sociology professor at Princeton University.

Others see this explanation as too pat. Carl Haub, a demographer at the Population Reference Bureau, a private research group in Washington, says that by 1988 fertility rates had begun to rise for women of all ages. Most significantly, births to white 15-to-17-year-olds, which had been flat for years, jumped by 9% between 1986 and 1988. "This could have a tremendous long-term impact on the fertility rate," says Stephanie Ventura, a demographer at the National Center for Health Statistics, the government agency that tracks fertility. "If you start childbearing that early, you're likely to have more kids, regardless of what you say now."

JOB DROUGHT. Would this be enough to keep women at home? The increase in working women has slowed for sure: The labor force participation rate of women age 20 to 44 jumped by 8 percentage points between 1975 and 1980, by 5 points over the next five years, and by 3 points from 1985 to 1990 (charts). The rate didn't budge at all from 1989 to 1990--which hadn't happened in two decades. Hartmann and other economists mostly blame the recession. They note that jobs in retailing and services, where many women work, started to dry up even before the recession began. For proof, they point to the welfare rolls, which many single mothers join if they're jobless. A record 4.3 million families are on welfare now, up 13% since 1989.

In fact, many analysts still believe that the upper limit of women who want to work is close to the 90% found in Sweden. Some 75% of American women age 25 to 54 work outside the home. So if the theory is right, their participation rate may rise again as more jobs open up, since most families need the money women earn. "I don't see men's earnings shooting up to compensate for women dropping out," says Howard V. Hayghe, a BLS economist who studies women's issues.

What makes the analysis tricky is the anecdotal evidence of a shift in national priorities back toward families and children. Yankelovich's annual survey asks whether people would quit work permanently if money allowed. For years, about a third of all women said yes. Then in 1990, the figure hit 56%. That year, 39% of women said women should work only part-time if they have children in school, up from 31% in 1989. Other surveys, by the Roper Organization and The Washington Post, have found similar changes in opinion. "Women have more of an interest in staying home with their kids, even though we expect to return to a job later," says Heidi L. Brennan, the co-director of Mothers at Home, a support group based in Washington. Its nationwide membership has doubled in two years, to 15,000.

GENDER GAP. If Brennan is right, employers could face tough times. Most companies are bracing for the labor and skill shortages predicted in 1987 by the Labor Dept.'s Workforce 2000 study. And even those projections may be too optimistic. When Fullerton updated the BLS figures two years ago, he estimated that 12 million women would join the labor force between 1988 and 2000. Now he's rethinking this. If only 10 million more women choose to work, it would cut 10% off the overall labor force increase of 19.5 million men and women that Fullerton had predicted. This might be offset somewhat by last year's immigration law, which may let in more than a million new workers over the next decade. Still, says Fullerton, hiring could "be difficult for employers looking for people whose native tongue is English."

Paradoxically, some economists believe that living standards could rise if fewer women take jobs. In this view, in the 1980s employers chose relatively cheap labor as an alternative to improving productivity. Labor shortages should finally make them boost output per worker--and then pay everyone more, says Richard Jackson, a research fellow at the Hudson Institute, which helped produce the Workforce 2000 study.

The idea that fewer workers could lift overall U. S. income sounds daft. But then, a couple of years ago, hardly anyone saw even a chance that women might have second thoughts about working away from home.

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