Board of Governors of the Federal Reserve System

Employment

The share of adults who were working in late 2021 remained below the pre-pandemic level. Health limitations, concerns about COVID-19, and family responsibilities were common reasons for not working. Many also switched jobs in 2021, and those who did generally said their new job was better than their old one.

Reasons for Not Working

Twenty-three percent of prime-age adults (ages 25 to 54) were not working in October 2021, down from 26 percent in 2020, but up from 21 percent in 2019, before the pandemic.¹⁹

Health limitations and concerns about getting COVID-19 were commonly cited reasons for not working. Twelve percent of all prime-age adults were not working, at least in part, for one of these reasons. Health limitations or disability were cited by 9 percent and specific concerns about COVID-19 were cited by 7 percent (figure 10). Family responsibilities were also commonly cited as reasons for not working.

The proportion of prime-age adults who said that they were not working because they could not find work fell from 9 percent in 2020 back to 5 percent in 2021, the same as before the pandemic.²⁰

Two percent of all prime-age adults said that they were not working, at least in part, because they didn't want to lose access to unemployment insurance or other government benefits.²¹ Among those whose family received government benefits in the prior year, 6 percent indicated that benefit eligibility contributed to them not working.²² However, even among benefit recipients, other factors including concerns about COVID-19 exposure (15 percent) and an inability to find work (11 percent) were more likely to be cited as reasons for not working.

Prime-age women were particularly likely to say that they were not working because of childcare and other family responsibilities. Six percent of prime-age women cited childcare as a reason for not working, and 10 percent cited other family responsibilities, far exceeding that for men (figure 11). However, the share of women not working because of childcare responsibilities did not increase relative to that seen before the pandemic.

Another difference between prime-age men and women is that women were more likely to say they were not working, at least in part, because of concerns about getting COVID-19. Eight percent of prime-age women cited concern about getting the virus as a reason for not working, compared with 5 percent of prime-age men. Previous studies have found that occupations with more women working in them before the pandemic had higher rates of COVID-19 exposure.²³

Working from Home

A major change in many people's work lives since 2019 was the increased prevalence of working from home, also known as remote work. During the week of the survey in late 2021, 22 percent of adults who worked for someone else ("employees") worked entirely from home. This share was down from 29 percent in 2020, but well above the 7 percent who worked entirely from home in 2019, before the pandemic.²⁴ In addition, 17 percent of employees said they worked from home some of the time during the week of the survey in 2021. For some workers, such as those with disabilities, the increased prevalence of remote work in recent years may have facilitated greater participation in the labor market (see box 1).

Employees with more education were much more likely to work from home than those with less education. Thirty-three percent of employees with at least a bachelor's degree worked entirely from home, whereas 14 percent of employees with some college, and 9 percent with a high school degree or less, did so (figure 12).²⁵

One reason for the differences by education is that employees with more education were more likely to have a job where they could work from home. Nearly three-fourths of employees with a bachelor's degree or more either worked from home or said that they could if their employer would let them, compared with 29 percent of employees with a high school degree or less. Overall, 53 percent of employees either worked from home or said that they could if their employer would let them.

 

Most employees who worked from home, or who said they could if their employer would let them, would prefer to work from home. Eighty-nine percent said they would like to work from home at least some of the time. Forty-one percent said they would prefer to do so all of the time.

Employees who preferred to work from home at least some of the time most commonly cited less time commuting and work-life balance as reasons (figure 13). Both were cited by 89 percent of employees who preferred to work from home.

Another common reason employees said they preferred to work from home was increased productivity. Seventy percent of employees who preferred to work from home said that one reason for their preference was that they were more productive at home. While lower, 56 percent of employees who preferred to work from home said that concerns about COVID-19 contributed to their preference.

Many of those who worked from home at least some of the time also said that they would actively look for another job if their employer required them to work in person each workday. Forty-five percent said they were at least somewhat likely to look for another job or leave their job if their employer required them to work in person each workday.²⁶ Twenty-two percent were very likely. Among those working from home full time, an even larger 55 percent said that they would be somewhat or very likely to look for another job if required to report in person each workday.

For context on the importance of the ability to work from home in people's job decisions, the survey also asked respondents about their likelihood of looking for another job if their employer froze their pay or cut their pay by various amounts.²⁷ The share of employees who were at least somewhat likely to look for another job if their employer required they work in person was similar to the share who would look after a pay freeze (figure 14).

Job Changes

In the fourth quarter of 2021, 15 percent of workers said they were in a different job than they were 12 months earlier. Most people who changed jobs said that their new job was better than their old one. Over 6 in 10 people who changed jobs said their new job was better overall, compared with 1 in 10 who said that it was worse.

Pay, opportunities for advancement, and interest in the work were frequently seen as better in the new job. Just over half of people who changed jobs said that their pay and benefits improved, compared with 20 percent who said their pay was worse. Similarly, far more people said that their work-life balance, opportunities for advancement, and interest in the work improved than said these measures declined (figure 15).

Of the characteristics considered, COVID-19 policies and exposure were the most likely to be the same in the old and new jobs. Nearly two-thirds (64 percent) of job changers said that COVID-19 policies and exposure were about the same, while one-fourth said that they were better, and 11 percent said that they were worse.²⁸

Workers who experienced a layoff and changed jobs were less positive about their new positions than other job changers.²⁹ Those who were laid off were substantially less likely than those not laid off to say their new job was better overall.³⁰ They also were less likely to say that the pay and benefits, opportunities for advancement, and interest in the job improved at their new position (figure 16).

COVID-19 Precautions at Work

One factor in people's decisions on whether to work and where to work is their perceptions of workplace safety, including COVID-19 precautions. Employees mostly thought that their employers were taking the right amount of precautions to prevent the spread of COVID-19. Seventy-seven percent of employees said their employers were taking the right amount of precautions. Those who did not were almost evenly split between thinking their employers were taking too many (11 percent) and too few precautions (12 percent).³¹

In terms of specific precautions, just under one-fourth of employees said that their employer had a policy requiring vaccination. An additional 19 percent of employees said that employees could either be vaccinated or be tested regularly. Forty-nine percent said their employer had no specific vaccine or testing requirement.³²

Employees were almost evenly split on whether they wanted vaccine requirements in their workplaces. Forty-nine percent of workers said that they wanted their employer to require vaccinations of all employees, whereas 51 percent said that they did not. The share who wanted a vaccine requirement was higher (59 percent) among employees who had a COVID-19 vaccine themselves. Just 4 percent of workers who were not vaccinated wanted their employer to require vaccines.

Part-Time Jobs, Temporary Jobs, and Irregular Schedules

Thirteen percent of adults worked part time at their main job, and 5 percent said that their main job was a temporary position. The share of adults who were working part time declined 1 percentage point from 2020 to 2021. Part-time work was more common among women than among men. Sixteen percent of women worked part time, while 10 percent of men did.

One indication of a stronger job market is that the share of part-time workers who said they wanted to work more hours declined to 41 percent in 2021, from 51 percent in 2020. Differences remained across the population, however. For example, a higher 58 percent of Hispanic part-time workers said that they wanted more work.

People who had a part-time or temporary job reported more financial strain than people who worked full time. Twenty-nine percent of part-time workers and 31 percent of temporary workers said that they were either just getting by or finding it difficult to get by. A smaller 16 percent of permanent, full-time workers reported the same levels of financial strain.

Some employees also had irregular schedules, including 16 percent who had a work schedule that varied based on their employer's needs. These workers with irregular schedules that they did not control tended to be under more financial strain. Twenty-seven percent of workers with a schedule that varied based on their employer's needs said that they were either just getting by or finding it difficult to get by. This compares with 16 percent of workers with a fixed schedule or with a schedule that they control.

The Gig Economy

Individuals who perform gig work or other gig activities may be contributing to the economy in ways not observed through traditional employment measures. To understand this aspect of the economy, including the effects of the gig economy on household finances, the survey includes a series of questions about gig activities. Gig activities in this report include selling items at places such as flea markets and garage sales or through online marketplaces, short-term rentals of items or property, and freelance gig work such as ridesharing or other roles where people are paid for specific tasks and generally have flexibility about when and how to work.

Overall, 16 percent of adults had performed gig activities over the prior month.³³ This includes 11 percent who sold things, 1 percent who offered short-term rentals, and 6 percent doing other freelance or gig work (with some people performing more than one type of gig activity) (figure 17).

Most commonly, people sold things that they owned for personal use, like clothing. Eight percent of all adults sold a personal item in the prior month. A smaller 3 percent sold something that they purchased to resell, and 2 percent sold something that they made.

Gig activities were typically not full-time jobs. Sixty-four percent of those who performed gig activities (10 percent of all adults) said they spent less than 20 hours doing so over the prior month. That said, those doing freelance gig work were more likely than those selling or renting items to spend at least 20 hours on it over the prior month.

People performing gig activities often had another job. Over half of those performing gig activities (54 percent) also had a job working for someone else. Even among those who spent at least 20 hours on gigs, 46 percent reported that they had a job working for someone else.³⁴

As a result, gig activities were rarely people's main source of income. Only 2 percent of all adults said they earned more than half of their income from gigs over the prior month. An even lower 1 percent of all adults said that they earned at least 90 percent of their income from gig activities.

People with lower financial well-being were more likely to perform gig activities than those who were faring better financially. One-fourth of people who found it difficult to get by financially did gig activities, compared with 13 percent of those who were living comfortably (figure 18). At the same time, however, people who performed gig activities were more likely to say that they did it by choice (71 percent) than out of necessity (29 percent).

People who did freelance gig work also varied in how they felt their pay compared with what they could earn from a more traditional job. Thirty-three percent of people who did freelance gig work said that they earned more doing gig work than they could in a traditional job, while 39 percent said they earned less. The remaining 28 percent said they earned about the same amount as they could in a traditional job.

 

References

 19. This pattern is consistent with that observed by the Bureau of Labor Statistics, who reported 22 percent not working in October 2021, down from 24 percent not working at the time of the survey in 2020, but up from 20 percent in October 2019. See U.S. Bureau of Labor Statistics, "(Seas) Employment-Population Ratio—25–54 yrs.," https://data.bls.gov/timeseries/LNS12300060. Return to text

 20. Some of the decrease could have been due to a change in the questionnaire from 2020 to 2021 to include an additional reason that respondents could give for why they were not working, although respondents still could give multiple answers. Return to text

 21. The survey was conducted in the fourth quarter of 2021, after the expiration of expanded unemployment insurance programs in September. Return to text

 22. Government benefit recipients include prime-age adults whose family received unemployment insurance, Social Security, Supplemental Security Income, TANF, other cash welfare assistance, SNAP benefits, Medicare, or Medicaid. Return to text

 23. Stefania Albanesi and Jiyeon Kim, "Effects of the COVID-19 Recession on the U.S. Labor Market: Occupation, Family, and Gender," Journal of Economic Perspectives 35, no. 3 (Summer 2021): 3–24, https://www.aeaweb.org/articles?id=10.1257/jep.35.3.3. Return to text

 24. The question asked in 2019 was different from 2020 and 2021. The 2019 survey asked where people worked in their main jobs most of the time. Return to text

 25. There is variation across industry in the likelihood of working from home, although even within an industry those with a bachelor's degree are generally more likely to work from home than are those with less education. Return to text

 26. However, 16 percent of those working from home who said that they would prefer to work in person also said that they would actively look for another job in this situation. This suggests that at least some of these individuals either were actively looking irrespective of the work location, or they value being given the choice of where to work even if they chose not to work from home. Return to text

 27. The order of the pay cut and telework questions was randomized in the survey, as was the amount of the pay cut that respondents were asked about. Return to text

 28. Better COVID-19 policies could mean stricter or more lenient policies, depending on the preference of the respondent. The survey did not define what better or worse policies meant. Return to text

 29. Seven percent of adults said that they were laid off in the 12 months prior to the survey. Return to text

 30. People's perceptions of their old jobs likely also reflect the circumstances of their leaving, including negative feelings from getting laid off. Moreover, while it is likely the laid-off worker is comparing their new job to the job they were laid off from, it is also possible they had another job in-between. Return to text

 31. One important aspect, however, is that people who had left an employer over their level of precautions would not have been asked this question about the job that they left. In these cases, an individual will be asked about the precautions at their new job or, if not working, would not be asked the question at all. Nevertheless, most who changed jobs said that their new job's COVID-19 policies were no better or worse than at their previous job. Return to text

 32. The remaining 8 percent did not know if there were any requirements. Return to text

 33. It is not possible to compare how frequently people did gig activities in 2021 with prior years because the gig economy questions were revised substantially in 2021 to refine the definition of gig activities and to reduce respondent burden. Return to text

 34. Gig questions were asked separately from the standard employment questions. One percent of all adults said that they were both not employed and spending at least 20 hours on gig activities in the prior month. Return to text