The Gig Economy Optimized Everything. It Forgot This: The $7.6 trillion asset Silicon Valley never unlocked.
Last week on The Tradeoff, I gave listeners a glimpse into something that lives rent-free in my brain: how we talk about women and the economy.
Not as an equity issue. Not as a culture war. As a straightforward economic problem.
What the Data Shows
Between 2020 and 2024, prime-age women's labor force participation hit its highest recorded level in history. Mothers of children under five led the recovery. Women started nearly half of all new businesses three years running. The mechanism was remote work — not as a perk, but as load-bearing infrastructure that functionally reduced the transaction cost of working motherhood in a childcare market that was already broken.
Then 2025 arrived. In the first seven months of the year, 212,000 women left the workforce while 44,000 men joined it. Return-to-office mandates nearly doubled across Fortune 500 companies. Federal childcare stabilization funding expired. The wall came down.
The Reframe
For twenty years, the defining innovation story of the American economy has been the unlocking of dead capital. The term comes from economist Hernando de Soto, who estimated $9.3 trillion in global assets were economically inert because structural barriers prevented them from entering formal markets. Silicon Valley applied that logic to physical assets: your car, your spare bedroom, your pool, your parking spot. The entire gig economy is one long answer to the question: what's sitting idle that could be generating value?
That question was never asked about the female workforce.
Women's labor contributes $7.6 trillion to US GDP annually — more than Japan's entire economy. The World Bank estimates closing the gender employment gap could increase global GDP by more than 20 percent. And the International Monetary Fund has a specific technical term for what happens when women are discouraged from working.
Not inequality. Not the gender gap.
Misallocation of resources.
That word matters. Misallocation is an economic diagnosis — the same category of problem de Soto identified in Peruvian property markets, the same inefficiency Silicon Valley spent two decades solving for spare bedrooms. It means capital with productive potential that structural barriers are preventing from being deployed. It means waste.
The Data Point Nobody Is Connecting
A 2025 paper from the Federal Reserve Bank of Minneapolis by economist Stefania Albanesi found something I believe is one of the most important economic insights of the year — and almost no one has connected it to the current moment.
The Great Moderation — the longest sustained period of reduced economic volatility in modern American history, from 1983 to 2007 — coincided precisely with the rise in women's labor force participation. The onset of jobless recoveries in the early 1990s coincided precisely with women's LFP plateauing. Her conclusion: women's rising workforce participation didn't just add workers to the economy. It stabilized the business cycle itself. When women stopped entering the workforce in larger numbers, that stabilizing mechanism disappeared.
We didn't name it. We didn't protect it. We just benefited from it — and now we're reversing it while the employment picture gets described as "confusing."
It is not confusing if you know what to look for.
The Proposition
The United States is the only OECD member without paid family leave at a national scale. Childcare now consumes 20 percent of the average family's income against a federal affordability benchmark of 7 percent. A January 2026 LendingTree analysis found a two-child household needs to earn $402,708 to hit that threshold. The median two-child household earns $145,656.
These are not the numbers of a country treating female human capital as an asset worth deploying.
Every dollar of female human capital sitting idle because the childcare market failed or an employer pulled flexibility is as economically wasteful as a car in a driveway. The only thing missing is the political will to treat it the same way — as an asset worth building infrastructure to deploy.
Both episodes are available now wherever you listen. The Tradeoff with Mattie Duppler — economics in under 11 minutes, every week.
Photo credit: TWAM - Tyne & Wear Archives & Museums - Women at Work