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Women Catching Up in German Labor Market - Participation Rate Rising Faster Than That of Men

Press Release of January 30, 2015

The labor force participation rate for women has increased by ten percentage points since 1995, while the corresponding figure for men has only risen by one percentage point. Reasons for this include women’s improved qualifications, which are catching up with those of men, and their greater willingness to participate in working life and take advantage of changes in the economic structure.

Women are playing an increasingly important role in the German labor market. These are the findings of a new analysis conducted by the German Institute for Economic Research (DIW Berlin). Accordingly, the participation rate for women in Germany has risen by around ten percent since 1995—while for men it has only increased by about one percentage point. In 2013, 46 percent of all workers in the country were female. However, given that more women than men continue to work part-time, their share of work volume remained lower—at around 40 percent. In 2013, almost half of working women were in part-time employment, but only one in nine working men. While women’s willingness to participate in working life has increased in the past two decades across all age groups and qualification classes, men’s propensity to work rose substantially only among those aged 55 or older. DIW’s labor market expert, Karl Brenke, noted that the increased labor force participation may have helped considerably to alleviate demographic developments.

Never before have so many women been employed in Germany. Between 1995 and 2013, the number of economically active women increased by 3 million. Growth in the participation rate has been particularly strong over the past ten years: from 2004 to 2013, it was around eight percentage points, compared to only about two percentage points between 1995 and 2004. The total female labor force—that is, women who either already have a job or are looking for one—grew considerably by about three million: from 16.7 million in 1995 to 19.7 million in 2013. While the labor force participation rate of women has increased almost constantly over the entire observation period, the development for men was much more variable with their labor market participation rate falling significantly between 1998 and 2004 and now only around one percentage point higher than in 1995. The male labor force grew only slightly over the entire period—from 22.4 to 22.9 million.

Brenke suggests the increased participation of women in the labor force is due to the increased level of education of women. “The following maxim applies to both men and women: the higher their qualifications, the greater their participation in working life. The qualification level of women has increased considerably, particularly due to the withdrawal of poorly qualified age cohorts from the labor market and is now approaching that of men.” Since this trend will continue, Brenke expects labor force participation among women to continue rising in the future. But, regardless of qualifications, women’s willingness to participate in the labor market has increased markedly—and in all age groups. He believes reasons for the development include changes in the economic structure. “In recent years, female-dominated sectors, such as health and social services, and education have grown notably. In traditionally male-dominated industries such as manufacturing, however, labor market developments have been less favorable.” Brenke’s analysis was based on data from the official microcensus.