FAO releases report on women in Ontario’s labour market

May 16, 2023 – The Financial Accountability Office of Ontario (FAO) released a report that analyzes labour market trends of women in Ontario.

Over the last 45 years, women have made significant headway in Ontario’s labour market. Rising educational attainment, increased opportunities in the service sector, flexible work arrangements and family-friendly government policies have helped lift the labour participation rate of Ontario women from 49.6 per cent in 1976 to 61.2 per cent in 2022. As well, the gender wage gap, which measures women’s hourly earnings compared to men, steadily improved over the 1997 to 2010 period.

Despite these advancements, women continue to face labour market disparities when compared to men, including barriers to opportunities and earnings. Ontario women are disproportionately represented in part-time jobs, take more time off from work for family responsibilities, and are underrepresented in management positions. In 2022, the labour participation rate for core age (25 – 54 years old) women was 7.9 percentage points lower than for men. The gender wage gap has made no progress over the past decade, with women earning 87 cents for every dollar earned by men in 2022.

Participation in the labour market is significantly impacted by motherhood, with many women taking time away from employment and facing earnings losses following childbirth. The core-age labour participation gap between men and women without young children has narrowed significantly over time to just 3.4 percentage points in 2022. In contrast, the gap between mothers and fathers with young children was much larger at 14.1 percentage points in 2022.

Using new data the FAO finds that after having a child, Ontario mothers earnings are cut in half and it can take up to four years to return to their pre-childbirth earnings level. 

The implementation of $10 a day child care has the potential to improve women’s labour participation. Assuming the objectives of the bilateral agreement between Ontario and the federal government are met, the FAO estimates that subsidized child care in Ontario could increase the labour participation rate of core age women from 84 per cent in 2022 to between 85.6 and 87.1 per cent by 2027. This would add 50,900 to 98,600 more women to Ontario’s labour force.