Working moms drive labor supply recovery—but what happens when remote work ends?

More working-age Americans are taking part in the labor market and strengthening the economy, but there’s a lesser-discussed demographic that’s been making up for lost time: working moms.
Economists at Wells Fargo say the labor force participation rate among prime-age women (aged 25 to 54) has seen its “sharpest” rise since early 2020, reaching a record peak in June.
An August report from Brookings further pinpoints that women with children under the age of five are “powering the pack’s upward trajectory.” Over 70% of these mothers are participating in the workforce—surpassing its pre-pandemic peak by 1.4 percentage points.
While this figure might not seem like a drastic increase at first glance, Brookings reveals the group has seen the fastest uptick in participation after holding fairly steady for over a decade.
Brookings says prime-age women have “contributed the most to the post-pandemic rebound in overall labor force participation.”
In the first year of the pandemic, mothers dropped out of the workforce in droves to care for their children due to daycare closures and reduced school supervision hours.
But since then, flexible working arrangements and boosted funding for childcare helped ease the group back to employment.
That said, more companies calling for an end to remote work could pose a significant problem for working mothers nationwide—and their strides in bolstering the labor force.
More companies are clamoring for workers to return to the office
This year, many companies began requesting employees return to the office, either through hybrid or fully in-person arrangements.
An August survey from Resume Builder revealed a stunning 90% of companies with a physical workspace want to implement return-to-office policies by next year—although most don’t expect workers to attend the office five days a week.
To make matters worse, the extra federal funding from the American Rescue Plan Act expired in September, putting thousands of daycares at risk of closure and over 3 million children at risk of losing access to care, according to a forecast from think tank The Century Foundation.
Wells Fargo economists don’t believe these changes will significantly reverse the gains made in the workforce participation rate by prime-age women in general due to other trends in employment.
“Rising educational attainment, the ongoing shift toward industries more friendly to women (via more knowledge-based and healthcare-oriented occupations) and later and lower fertility patterns have all supported women’s participation over the past 50 years,” they said.
They add, “Greater flexibility on work location with more widespread work-from-home options should also help to support participation for women with young children.”
But Brookings calls for further action to support women in the workforce, such as implementing a universal paid maternity leave policy and increasing access to high-quality and affordable child care.
It’s not just women
While the U.S. has been grappling with a labor shortage for years, causing some desperate employers to offer more incentives and higher pay to lure workers—things aren’t looking so bad today.
In addition to working mothers, other demographics have also been returning to work. As a result, the overall labor force participation rate has gradually recovered to nearly 63%, gaining closer to pre-pandemic levels, according to the most recent data from the St. Louis Fed.
And while there’s been a decades-long trend of prime-age men stepping back from the workforce, especially among those who haven’t pursued or completed a higher education, this could be reversing.
The economists at Wells Fargo note that increases in skills-based hiring, demand in blue-collar industries, and even immigration have provided a much-needed lift to the participation rate of men aged 25 to 54.