SHE can’t afford it and HE doesn’t want it: The gender gap in the COVID-19 consumption response
Stefanie J. Huber 30 April 2022
Women’s economic prospects in the developed world are disproportionately hurt by the COVID-19 pandemic (Alon et al. 2021). There are three main reasons for this. First, the initial economic consequences of the pandemic were focused on sectors traditionally dominated by women; hence, women were more likely than men to lose their jobs (ILO 2020, Albanesi and Kim 2021, Adams-Prassl et al. 2020). Second, estimates from medical research suggest that 8–35% of the infected will suffer from long Covid, with lower rates expected for the vaccinated. Research further indicates that one of the largest risk factors for long Covid is gender, with women more likely to suffer its consequences (Augustin et al. 2021, Sudre et al. 2021, Taquet et al. 2021). Finally, women in normal times shoulder the majority of household caring work, and ongoing crisis-related changes have tended to increase these caring burdens since March 2020 (Alon et al. 2020, Del Boca et al. 2020, Ma et al. 2020).
Traditionally, economists have measured inequality by focusing on income, wages, and wealth (Piketty and Saez 2006). In line with this, economic research on the impact of COVID-19 on gender equality has focused mainly on the gendered effects on employment and unpaid work during the pandemic’s early phases (e.g. Dang and Nguyen 2021, Adams-Prassl et al. 2020, Hupkau and Petrongolo 2020a and b, Queisser et al. 2020). However, when assessing relative economic wellbeing across households, empirical evidence suggests that focusing on consumption could be the most insightful approach (Meyer and Sullivan 2011 and 2012, Attanasio and Pistaferri 2016). Moreover, Krueger and Perri (2006) and Blundell and Preston (1998) show that the distribution of consumption expenditures and not income is the critical measure of inequality in a household’s wellbeing.1
My recent paper (Huber 2022) investigates whether the pandemic and the associated lockdowns have differentially altered women’s and men’s consumption behaviour. It uses data from a large-scale representative consumer survey (in France, Germany, Italy, the Netherlands, and Spain) conducted by Hodbod et al. (2021). The survey was conducted after the first 2020 wave of lockdown and travel restrictions were lifted, between 10–28 July, and elicits detailed information about respondents’ socioeconomic backgrounds, changes in consumption behaviour, and the primary reasons for their changed behaviour in social distancing-sensitive (SDS) sectors.2
The gendered COVID-19 consumption response
In all five countries, women reduced consumption compared to pre-pandemic levels significantly more than men (see Figure 1). The consumption gender gap is substantial in the tourism, retail, hospitality, and services sectors.
Figure 1 Gender gap in consumption drop (by sector and country)
Notes: The gender gap is measured by the relative gender difference in the consumption drop. Formally, (F/M – 1) * 100, where F denotes the fraction of women reporting to consume now “less often” or “not at all”—compared to pre-pandemic; and M denotes the corresponding male fraction.
Source: Huber (2022).
One explanation for these observed differences could be that women and men have objectively different socioeconomic characteristics. However, my research finds that these ‘objective’ gender differences (e.g. income, employment status, education, occupation, age, and household size) explain only a modest amount of the COVID-19 induced consumption gender gap. Gender differences in pessimism about the macroeconomic outlook and worries about the personal financial future seem more relevant, but a sizable consumption gender gap remains.
What could account for the remaining unexplained gap in consumption behaviour?
One theory to explain the remaining gap is that the unexpected limitations on the availability of goods and services during lockdown may have led to a reassessment of ‘subjective’ consumer preferences. This reassessment of subjective preferences might differ between women and men, which could lead to differing consumption patterns. Literature – spanning psychology, biology, neurosciences, management, and consumer research – has already documented how personal experiences can influence behaviour, including preferences. For example, Ross et al. (2020) find that a loss of time, space, or money tends to influence not only immediate household consumption choices but also changes underlying consumer preferences. Coping with economic contractions helps consumers prioritise what matters to them, leading to a refinement of preferences. In economics, a young literature is emerging and building evidence that personal experiences of large macroeconomic shocks can permanently change expectations, preferences, and behaviour (e.g. Cotofan et al. 2021, Hodbod et al. 2021, Kuchler and Zafar 2019, Malmendier and Nagel 2016, Giuliano and Spilimbergo 2014, Malmendier and Nagel 2011).
However, none of these studies investigates potential gender differences in the response to experience. My work questions whether women and men react differently to their experiences of macroeconomic conditions, using the COVID-19 pandemic as an example of such an experience. The data set collected by Hodbod et al. (2021) is ideal for assessing the pandemic’s impact on gender consumption equality. It includes the traditional reasons for reducing consumption (i.e. financial constraints, precautionary saving motives, infection risk) but also potential consumer preference shifts resulting from the lockdown experience. The distribution of these self-reported primary reasons differs significantly between women and men (Figure 2a).
SHE can’t afford it: Gender differences in affordability
Women report financial constraints 30% more often than men as the primary reason for consuming less than pre-pandemic. The gender gap in self-reported affordability constraints is sizeable in all SDS sectors. Women report the precautionary saving motive 12% less often than men as the primary reason for reducing consumption. Generally, women are expected to be more risk-averse than men (Nelson 2016, Croson and Gneezy 2009). In addition, gender differences in occupation might induce different perceptions about COVID-19 health risks, and hence consumption behaviour. In fact, concerns about infection risks represented the smallest gender gap in self-reported primary reasons for reducing consumption, with women reporting infection risk as a reason 9% more often than men. By contrast, the gender gap in declared financial constraints is three times larger than the gender gap in reported infection risk.
Figure 2 Primary reason gender gaps
Notes: The gender gap in primary reason x is measured by the relative gender difference in reporting reason x. Formally, (F/M – 1) * 100, where F denotes the fraction of women reporting reason x for consuming less compared to pre-pandemic; and M denotes the corresponding male fraction.
Source: Huber (2022).
HE doesn’t want it: Gendered lockdown experience effect
Figure 2a shows large gender differences in the reporting of permanent preference shifts as the primary reason for reduced consumption. The gender gap in self-reported consumer preference shifts is of considerable magnitude in all SDS sectors. Men report significantly more often than women the realisation of not missing consumption as the primary reason for consuming less than pre-pandemic levels. Men are more likely to have learned to live with and adapted to the limited consumption possibilities during lockdown. After lockdown lifted, men reported not missing consumption 22% more often than women as the primary reason for consuming less compared to pre-pandemic levels. Mainstream media refers to this concept as ‘JOMO’ – the joy of missing out.
Cross-country similarities and heterogeneities
Gender differences in most economic outcomes vary significantly across countries, and the consumption gender gap induced by COVID-19 is no exception. The cross-country differences in the size of the consumption-drop gender gap are striking in all sectors (Figure 1). The largest gaps are found in Germany and France, while the gap is smallest in the southern European countries. Depending on the sector, the gender gap is two to three times larger in Germany than in Italy or Spain.
Finally, Figure 2b reveals striking cross-country similarities and differences in the distribution of primary reasons for reducing consumption between women and men. While the preference-shift gender gap is of a similar magnitude in all countries, the cross-country differences in the affordability gender gap are substantial. Spain and France show only a tiny affordability gender gap; other countries show a very considerable gap. The affordability gender gap is largest in Germany and Italy, followed by the Netherlands. In Germany, women report financial constraints 60% more often than men as their primary reason for reducing consumption.3
Honing fiscal policy to ‘kill two birds with one stone’
In summary, non-durable consumption has declined much more for women than for men in all five countries. The consumption drop for women was driven mainly by perceived affordability difficulties, while for men the consumption drop was driven more by ‘subjective’ consumer preference shifts. Men chose in an empowered way to consume less as a result of the lockdown experience. These results contribute to the emerging evidence that the pandemic has increased gender inequality.
From a policy perspective, the observed patterns suggest that in the aftermath of social-distancing related economic disruption, fiscal authorities could have an opportunity to ‘kill two birds with one stone’ by supporting financially struggling women. In such circumstances, if one wishes to keep incumbent SDS firms alive, orienting fiscal support towards women could be an effective strategy. Compared to men, the low SDS consumption among women is driven more by perceived affordability constraints than by durable shifts in consumer preferences or precautionary saving motives. Thus, when affordability constraints are loosened, demand from women will swiftly return.
Adams-Prassl, A, T Boneva, M Golin and C Rauh (2020), “The large and unequal impact of COVID-19 on workers”, VoxEU.org, 08 April.
Albanesi, S and J Kim (2021), “Effects of the covid-19 recession on the US labor market: Occupation, family, and gender”, Journal of Economic Perspectives 35 (3): 3–24.
Alon, T, S Coskun, M Doepke, D Koll and M Tertilt (2021), “From mancession to shecession: Women’s employment in regular and pandemic recessions”, NBER Macroeconomics Annual 36.
Alon, T, M Doepke, J Olmstead-Rumsey and M Tertilt (2020), “The shecession (she-recession) of 2020: Causes and consequences”, VoxEU.org, 22 September.
Andersen, A, E T Hansen, N Johannesen and A Sheridan (2020), “Consumer Responses to the COVID-19 Crisis”, VoxEU.org, 15 May.
Attanasio, O P and L Pistaferri (2016), “Consumption inequality”, Journal of Economic Perspectives 30(2): 3–28.
Augustin et al. (2021), “Post-Covid syndrome in non-hospitalised patients with Covid-19: a longitudinal prospective cohort study”, The Lancet Regional Health – Europe, volume 6.
Baker, S R, R A Farrokhnia, S Meyer, M Pagel and C Yannelis (2020), “How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic”, The Review of Asset Pricing Studies 10(4): 834–862.
Blundell, R and I Preston (1998), “Consumption inequality and income uncertainty”, The Quarterly Journal of Economics 113(2): 603–640.
Bounie, D, Y Camara, E Fize, J Galbraith, C Landais, C Lavest, T Pazem, and B Savatier (2020), “The COVID-19 containment seen through French consumer transaction data: Expenditures, mobility and online substitution” VoxEU.org, 26 May.
Carvalho, V M, J R García, S Hansen, A Ortiz, T Rodrigo, J V Rodríguez Mora and P Ruiz (2020), “Tracking the COVID-19 crisis through the lens of 1.4 billion transactions”, VoxEU.org, 27 April.
CCSA (2020), “How covid-19 is changing the world: a statistical perspective”, Committee for the Coordination of Statistical Activities (CCSA) Working Paper, May.
Chronopoulos, D K, M Lukas and J O S Wilson (2020), “Real-time consumer spending responses to the COVID-19 crisis and government lockdown”, VoxEU.org, 06 May.
Collins, C, L C Landivar, L Ruppanner and W J Scarborough (2021), “Covid-19 and the gender gap in work hours”, Gender, Work & Organization 28(1): 101–112.
Coibion, O, Y Gorodnichenko and M Weber (2020), “The Cost of the Covid-19 Crisis: Lockdowns, Macroeconomic Expectations, and Consumer Spending”, Covid Economics: Vetted and Real-Time Papers 20.
Cotofan, M, L Cassar, R Dur and S Meier (2021), “Macroeconomic Conditions When Young Shape Job Preferences for Life”, The Review of Economics and Statistics, 1–20.
Cotton, C, V Garga and J Rohan (2021), “Consumption spending and inequality during the covid-19 pandemic”, Covid Economics: Vetted and Real-time Papers 83: 116–153.
Dang, H-A H and C V Nguyen (2021), “Gender inequality during the covid-19 pandemic: Income, expenditure, savings, and job loss”, World Development 140.
Del Boca, D, N Oggero, P Profeta and M Rossi (2020), “Women’s work, housework, and childcare before and during COVID-19”, VoxEU.org, 19 June.
Farré, L, Y Fawaz, L González and J Graves (2021), “Gender inequality in paid and unpaid work during covid-19 times”, The Review of Income and Wealth.
Giuliano, P and A Spilimbergo (2014), “Growing up in a Recession”, The Review of Economic Studies 2(287): 787–817.
Guglielminetti, E and C Rondinelli (2021), “Consumption and saving patterns in Italy during Covid-19”, Questioni di Economia e Finanza (Occasional Papers), 620, Bank of Italy.
Hassett, K and A Mathur (2012), “A new measure of consumption inequality”, AEI Economic Studies, 2.
Hodbod, A, C Hommes, S J Huber and I Salle (2021), “The COVID-19 a consumption game changer: Evidence from a large-scale multi-country survey”, European Economic Review, 14.
Huber, S J (2022), “SHE can’t afford it and HE doesn’t want it: The gender gap in the COVID-19 consumption response”, Tinbergen Institute Discussion Paper, 22-029/II.
Hupkau, C and B Petrongolo (2020a), “COVID-19 and gender gaps: Latest evidence and lessons from the UK”, VoxEU.org, 22 April.
Hupkau, C and B Petrongolo (2020b), “Work, care, and gender across UK lockdowns”, VoxEU.org, 23 November.
ILO (2020), “The Covid-19 Response: Getting Gender Equality Right for a Better Future for Women at Work”, Geneva: ILO brief.
Krueger, D and F Perri (2006), “Does Income Inequality Lead to Consumption Inequality? Evidence and Theory”, The Review of Economic Studies 73(1): 163–193.
Kuchler, T and B Zafar (2019), “Personal Experiences and Expectations about Aggregate Outcomes”, The Journal of Finance 74(5): 2491–2542.
Ma, S, Z Sun and H Xue (2020), “Childcare Needs and Parents’ Labor Supply: Evidence from the COVID-19 Lockdown”, SSRN Working Paper.
Malmendier, U and S Nagel (2011), “Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?”, The Quarterly Journal of Economics 126(1): 373–416.
Malmendier, U and S Nagel (2016), “Learning from Inflation Experiences”, The Quarterly Journal of Economics 131(1): 53–87.
Meyer, B D and J X Sullivan (2011), “Viewpoint: Further results on measuring the well-being of the poor using income and consumption”, The Canadian Journal of Economics 44(1): 52–87.
Meyer, B D and J X Sullivan (2012), “Identifying the disadvantaged: Official poverty, consumption poverty, and the new supplemental poverty measure”, Journal of Economic Perspectives 26(3): 111–36.
Meyer, B D and J X Sullivan (2013), “Consumption and income inequality and the great recession”, American Economic Review 103(3): 178–83.
Piketty, T and E Saez (2006), “The evolution of top incomes: A historical and international perspective”, American Economic Review 96(2): 200–205.
Ross, G R, M G Meloy and K A Carlson (2020), “Preference Refinement after a Budget Contraction”, Journal of Consumer Research 47(3): 412–430.
Sudre et al. (2021), “Attributes and predictors of long COVID”, Nature Medicine 27, 626–631.
Taquet et al. (2021), “Incidence, co-occurrence, and evolution of long-Covid features: A 6-month retrospective cohort study of 273,618 survivors of Covid-19”, PLOS Medicine.
Queisser, M, W Adema, C Clarke (2020), “COVID-19, employment and women in OECD countries”, VoxEU.org, 22 April.
1 A fast-growing literature investigates the impact of the pandemic and associated virus containment policies on household consumption. The literature uses transaction data (e.g. Andersen et al. 2020, Cotton et al. 2021, Carvalho et al. 2020, Baker et al. 2020, Bounie et al. 2020, Chronopoulos et al. 2020) or household survey data (e.g. Coibion et al. 2020, Hodbod et al. 2021, Guglielminetti and Rondinelli 2021). The column’s main contribution to this literature is twofold. First, it adds the gender perspective. Second, instead of merely documenting the gendered consumption drop, it investigates gender differences in the traditional reasons for reducing consumption (i.e. financial constraints, precautionary savings, infection risk).
2 Hodbod et al. (2021) find that consumption dropped substantially in July 2020 (when social distancing restrictions were lifted) compared to pre-pandemic levels. The principal reported reason for the consumption drop was infection risk; the second most cited primary reason was precautionary saving in the South and a permanent consumer preference shift in the North.
3 The data do not allow us to investigate causal explanations for these cross-country affordability gender gap differences. However, in Huber (2022) I provide indicative evidence that these cross-country differences cannot be explained by cross-country differences in relative educational attainment or labor force participation between women and men. Instead, the quality of labour force participation – power in decision making – might be an essential factor for these cross-country differences (Figure 3, page 14).