Investing in the Care economy to boost employment and gender equality

Date Posted: Thursday 31st March 2016

2016 briefing on a gender analysis of employment stimulus in seven OECD countries

Feminist EconomicsInvestmentSocial CareSocial Infrastructure


You can view and download the full briefing here.


A new report by the UK Women’s Budget Group for the International Trade Union Confederation (ITUC) shows that investing public funds in childcare and elder care services is a worthwhile investment that is more effective in reducing public deficits and debt than austerity policies: it would boost employment, earnings, economic growth and fosters gender equality. The report shows that an investment of 2% GDP in the caring industries would generate up to 1 million jobs in Italy, 1.5 million in the UK, 2 million in Germany and 13 million in the USA.

Despite years of austerity, severe cuts in public sector services and declining living standards for working people, economic growth prospects are worsening across major economies. For the G7 countries, the prospects for 2016 and 2017 are poor, despite low interest rates and low oil prices. Investment is low, trade is weak, commodity prices are falling, wages are stagnant and there are steep declines in global equity markets.

In short, the recipe for recovery based on a combination of ‘quantitative easing’ that is expanding the money supply available to investors while cutting back on public expenditure, has failed to stimulate growth, just as feminist economists and those on the political left predicted.

At last, this failure has been recognised by the international institutions. Launching their 2016 Interim Economic Outlook, Christine Mann, chief economist at OECD argues for ‘a greater use of fiscal (that is public expenditure) and pro-growth structural policies’ given that governments can borrow for long periods at very low interest rates without jeopardising public finances. Thus the OECD argues that governments should create the missing demand by investing directly in the economy themselves – the same recipe that John Maynard Keynes proposed in response to the Great Depression of the 1930s and one long advocated by feminists and those on the political left.

Key findings:

  • Government should rescind damaging austerity policies and invest in social infrastructure. It would provide employment, address the current crisis in care, and reduce gender inequalities in both paid and unpaid work.
  • In total, up to 1.5 million jobs could be created in the UK if 2% of GDP were invested in care industries, compared to 750,000 for an equivalent investment in construction.
  • Simulation results from seven OECD countries showed that investing 2% of GDP in public services of care would create almost as many jobs for men as investing in construction industries in the UK, US, Germany and Australia but would create up to four times as many jobs for women.
  • Women’s employment rate would rise by up to 8 points in the US and more than 5 points in the UK, Germany, Australia and Japan, reducing the gender employment gap by up to 50% in the US and a quarter in the UK.
  • Compared to business-as-usual austerity policies, significant public investment boost would have larger positive effects on economic growth and debt reduction in the mid-term (by 2030).

You can view and download the full briefing here.