Gender norms and household responses to economic shocks

Non Technical Summary

How economies respond to trade shocks depends not only on firms and workers, but also on how households adjust when employment opportunities change. This research asks whether gender norms in the UK influence those household responses and, in doing so, shape the wider economic effects of trade shocks. Understanding these mechanisms is important for predicting who bears the costs of trade adjustment and for designing policies that make trade more inclusive.

We use data from Understanding Society and its predecessor, the British Household Panel Survey, to examine how UK households respond to two types of economic shocks: involuntary job loss (layoffs) and changes in employment opportunities caused by increased import competition from China following its accession to the World Trade Organization in 2001. We compare households with more traditional and more progressive views on gender roles, measured using respondents' agreement with statements such as "A pre-school child is likely to suffer if his or her mother works."

We first study layoffs to understand how UK households adjust when one partner suddenly loses their job. In principle, families can cushion the shock by reallocating paid and unpaid work between partners. However, this adjustment may be constrained if gender norms limit how household responsibilities are shared.

Immediately after a layoff, UK households behave in remarkably similar ways regardless of whether the displaced worker is a man or a woman. The person who loses their job takes on more housework, reducing the amount of unpaid work carried out by their partner. However, partners do not use this additional time to increase their own labour market participation.

The longer-term picture is very different. Over the following decade, most displaced men return to employment, while many displaced women remain outside the labour market. Importantly, this difference is concentrated entirely among couples with traditional gender norms. Among couples with more progressive attitudes, women's employment trajectories after job loss closely resemble those of men. This suggests that persistent employment losses are not an inevitable consequence of layoffs, but depend on how households organise work and care responsibilities.

We find a strikingly similar pattern when examining trade shocks. In the UK, individuals employed in sectors that were more exposed to increased import competition from China experienced a modest decline in employment over the following two decades. However, average effects conceal substantial differences across households. For women with traditional gender attitudes, greater trade exposure translated into a small but persistent reduction in employment. By contrast, women with more progressive gender norms experienced no lasting decline in employment and fully recovered their working hours.

These findings show that gender norms influence not only household outcomes but also the economy's capacity to adjust to structural change. Households facing similar labour market shocks can respond very differently depending on how they divide paid work and caring responsibilities. As a result, social norms shape the persistence and distribution of the employment effects of trade.

The policy implications are clear. Analyses of trade adjustment typically focus on differences across industries, occupations or regions. Our findings suggest that household dynamics are another important source of variation in how people experience trade shocks. Policies designed to support adjustment should therefore recognise the barriers that may prevent some household members—particularly women in more traditional households—from remaining attached to the labour market.

Measures that reduce these barriers could strengthen households' ability to adapt to economic change. By enabling more flexible labour market responses, such policies would not only improve gender equality but also enhance the economy's resilience to future trade shocks.