Federal Reserve Chairwoman Janet Yellen said family-friendly policies that increase women’s participation in the workforce could boost economic growth and help the U.S. overcome longer-term challenges.
If obstacles like the gender wage gap and barriers to equal opportunities persist, “we will squander the potential of many of our citizens and incur a substantial loss to the productive capacity of our economy at a time when the aging of the population and weak productivity growth are already weighing on economic growth,” Ms. Yellen said Friday, according to remarks released ahead of delivery at Brown University in Providence, R.I.
Ms. Yellen said if the U.S. had the kinds of family policies common in Europe — like paid leave, better child-care provision and increased availability of part-time work — female labor-force participation in the U.S. could be significantly higher. She also referenced a recent study estimating that increasing the female participation rate to that of men would raise gross domestic product by 5%.
The Fed chairwoman didn’t comment on monetary policy in her prereleased comments. They came hours after the Labor Department reported that employers added a robust 211,000 jobs in April and the unemployment rate edged down to 4.4%, from 4.5% the month before.
The unemployment rate hasn’t been this low since May 2007, suggesting the Fed is likely to stay on course to raise interest rates gradually this year to prevent the economy from overheating.