Why Investing in the Care Economy is key to Gender Equity and Economic Growth
If the COVID-19 pandemic taught us one thing, it is that to continue on a steady path toward gender equity and a healthy economy, we must adequately value and invest in care workers. Some of the most exciting new social impact enterprises are addressing these issues through innovations in technology, organizing and care supply models.
The care economy impacts every single one of us and is a critical aspect of global development that until recently, been largely overlooked. It refers to all aspects of caring for individuals who can’t independently take care of themselves - children, elderly people, and those with disabilities and illness, and all the domestic labor surrounding this care. It is work that is often invisible, un(der)paid and largely performed by women. The Covid-19 pandemic did raise the visibility of care work as health systems were thrown into crisis, and there was insufficient labor supply in all types of care work. Women exited the workforce to care for children and sick relatives at exponentially higher rates than men, for which they (and all of us!) paid a high price. This public health crisis shed light upon and exacerbated many issues that were already problematic, reinforcing why a focus on improving the care economy is critical to gender equality and economic development in the US and globally.
The undervaluation and invisibility of care work disproportionately impacts women and increases inequality
The care sector also reinforces traditional gender roles, which creates barriers to women's participation in the labor market and a domino effect on equality. Globally, women perform 76.2% of the total hours of unpaid care work, which impacts the time they can spend on income-generating activities, and women who take time off from work to provide care are more likely to experience a wage penalty when they return to work. Women who provide care work often face social isolation and are less likely to participate in social and political activities. They are also more likely to experience poverty - in the United States, the poverty rate for female-headed households with children under 18 was 29.9% in 2020, compared to 16.5% for male-headed households with children under 18. These issues around care labor are what most contributed to the slowed progress toward gender equality that we saw during the pandemic years.
We are all missing out on the economic impacts of improved care work
Access to quality childcare and eldercare services can increase workforce participation, particularly for women. When women have equal access to education and employment opportunities, they can contribute to economic growth and development. In fact, the World Bank estimates that investing in early childhood education and care can yield economic returns of up to 17 times the initial investment. But the theory of change for supporting care work is not just about the direct impact on women and children; in fact, BCG estimated last year that the care economy is a $6 Trillion opportunity in the US alone! Investment in unlocking this potential growth would have positive spillover effects on other sectors, as default caregivers are freed up to participate more fully in the paid workforce. Similarly, by enabling elderly people to age in place and receive care in their homes, investing in eldercare can reduce healthcare costs and improve health outcomes.
We can improve gender equity and the economy by improving the supply of care workers and curbing the departure of productive workers from the workforce
Investing in the care economy isn’t only beneficial to individual women, it creates jobs and drives innovation. As the demand for care services grows, there is an opportunity to develop new technologies, products, and services that can improve the quality and efficiency of care workers, improving supply via new jobs and business opportunities in the care sector and beyond. There are more and more global social enterprises creating solutions to fill caregiving gaps and solve these problems, and I’ll highlight several of those in a future post. However, there also needs to be more attention paid to supporting caregivers from both the public and private sector to truly generate social and economic impact. In addition to new innovations, this includes expanding and rethinking parental and family leave policies, accounting for family obligations in how our workplace policies and environments are structured.
Investing in the care economy is only going to become more critical as the number of us caring for both children and elderly family members, aka “the sandwich generation” increases. In my next care economy post I’ll share some promising new social enterprises tackling these issues globally. In the meantime, share your ideas below - how have you been personally impacted by the lack of help with care duties? What have/would you find most helpful to improve your position and that of the care workers you rely upon?
