Investing 2% of GDP in care industries could create 1.5 million jobs

Date Posted: Tuesday 8th March 2016

A new report launched today shows that investing public funds in childcare and elder care services is a worthwhile investment

Feminist EconomicsGender BudgetingInvestmentSocial Infrastructure


A new report launched today 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.

Key findings of the report are:

  • 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)

Commenting on the findings, Dr Jerome De Henau, one of the authors of the study said:

“The recipe for a 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.

This has now even been recognised by international institutions, including the OECD, whose Chief Economist called for greater public investment in developed countries to stimulate growth.

Our research clearly shows that investment in the social infrastructure – in particular the care industries – not only delivers better social outcomes than austerity cuts by ensuring we have a healthy and educated society but also significant economic benefits.

Far from seeing the care industries as a drain on public finances, spending should be seen as an investment akin to investing in the physical infrastructure. In fact, our research clearly shows that investing in the social infrastructure generates more jobs and has a greater effect on output than a comparable investment in construction.

It is also worth noting on International Women’s Day, that an investment in the care industries has the potential to significantly reduce the gender employment gap, although a large number of jobs would also be created for men. With the Budget only a week away, we call on the Chancellor to invest in Britain’s future by making the care industries a priority for public investment.”

A link to the full report, and a briefing paper summarising the key findings, are included below:

Full report

Summary briefing