WBG responds to the Prime Minister’s speech: Invest in care to create jobs and growth

Date Posted: Tuesday 30th June 2020

Investment in Scandinavian-style universal care would create more than 2 million jobs

If the Prime Minister is serious about post pandemic growth then rather than ‘build, build, build’ he should invest in care to create jobs the Women’s budget Group said today.

Responding to the Prime Minister’s speech, the Women’s Budget Group highlighted new research showing that a net investment of around 2.5% of GDP in child care and social care would:

  • Create over 2 million well paid jobs;
  • Increase overall employment by over 5 percentage points and;
  • Decrease the gender employment gap by 4 percentage points.

Access the full data and report here

Research by Dr Jerome De Henau and Prof Susan Himmelweit for the group finds that investment in care has the potential to mitigate the worst employment effects of the Coronavirus recession:

  • Investing in care would create 2.7 times as many jobs as the same investment in construction: 6.3 as many for women and 10% more for men.
  • Increasing the numbers working in care to 10% of the employed population, as in Sweden and Denmark, and giving all care workers a pay rise to the real living wage would create 2 million jobs, increasing overall employment rates by 5% points and decreasing the gender employment gap by 4% points.
  • 50% more can be recouped by the Treasury in direct and indirect tax revenue from investment in care than in construction.
  • Investment in care is greener than in construction, producing 30% less greenhouse gas emissions. A care-led recovery is a green led recovery.

The Covid-19 pandemic has exposed and exacerbated the UK’s crisis in care that left care homes fatally unprotected and unprepared. At least 1.4 million older people have unmet care needs. Even before the pandemic there were over 100,000 staff vacancies in social care and recent data shows 1 in 4 care workers are considering leaving their jobs due to poor working conditions. Currently, UK parents pay the highest childcare costs in Europe and the second highest in the world.

Investment in care is needed to stop the collapse of both the child and adult care sectors. This research shows that such investment also provides a far better economic stimulus than investment in construction. It would also promote gender equality which the pandemic risks widening.

Professor Susan Himmelweit, co-author of the research said:

“The Prime Minister’s announcement today focussed on construction in order to stimulate the economy, and there is no doubt that we need greener energy and transport as well as more social housing. However, our research finds that it is actually investment in social infrastructure, including in a reformed social care system, that is most effective at creating employment.

Training, pay and working conditions in the care sector would need to be improved to attract new staff and transform our broken social care system. Investment in care under such conditions is an excellent way to stimulate employment, reduce the gender employment gap and counter the inevitable economic recession as the UK comes out of lockdown.”

Dr Jerome De Henau, co-author of the research said:

“In Scandinavian countries about 10% of the employed population work in care. Using this as our model, we found that it would be possible to give all carers a well-deserved pay rise and still recoup 50% more of the initial investment from direct and indirect tax revenue. Investment in child and adult social care creates more than double the number of jobs as the same investment in construction, giving it a greater impact on the overall employment rate. It also helps reduce the gender employment gap, which is at risk of widening due to Coronavirus. The Prime Minister’s announcement today has responded to the public calls for spending on infrastructure to stimulate the economy, but this must include social infrastructure. And our research finds this would be more effective at generating employment.”

Dr Mary-Ann Stephenson, Director, UK Women’s Budget Group said:

“‘Boris Johnson’s answer to the economic crisis caused by the Coronavirus pandemic is to ‘build, build, build’. But this analysis shows that our focus needs to be on ‘care, care, care’.

The care sector has been hardest hit by the tragic consequences of Coronavirus. Many care homes and nurseries say that they are struggling to make ends meet and could close within the year. Since women do most unpaid care work, shortages in care provision will make it harder for them to return to work. Investment in care is desperately needed to avoid a two tier return to work, and our research also shows that investment in care would also be good for the economy and for equality.

Unlike in previous recessions, women who are more likely to work in sectors like retail and hospitality, where redundancies seem inevitable due to social distancing requirements, may be the first to lose their jobs. Yet, with the right training, many women have skills that are transferable to care where staff are badly needed. Employing workers in care has the added benefit of being better for the future of the planet than work in more environmentally unfriendly sectors. Investment in care is economically and  environmentally sound and would increase equality.”


For more information contact The UK Women’s Budget Group:

Thaira Mhearban: thaira.mhearban@wbg.org.uk / 07838 222067/ Communications Officer

Dr Mary-Ann Stephenson: maryann.stephenson@wbg.org.uk / 07957 338582/ Director 

Notes to Editors  

The UK Women’s Budget Group (WBG) is an independent network of leading academic researchers, policy experts and campaigners who analyse the gendered impact of economic policy on different groups of women and men, and promote alternative for a gender-equal future.

This research was done in June 2020 by Professor Susan Himmelweit and Dr. Jerome De Henau, members of WBG. Using Eurostat data, it was possible to model the relative employment effects of investment in care and construction. The full report can be found here.

Table 1 The employment effects of investing 1% GDP in the care and construction industries.


Jobs generated in the industry

Jobs generated in other industries

Total jobs generated

of which for men

and for women













Ratio of employment effects care/construction






Source: Calculations by Jerome De Henau for WBG, based on 2015 data from Eurostat

Table 2 The FTE employment effects of investing 1% GDP in the care and construction industries, with matched wages.


FTE Jobs generated in the industry

FTE Jobs generated in other industries

Total FTE jobs generated

of which for men

and for women













Ratio of employment effects care/construction






Source: Calculations by Jerome De Henau for WBG, based on 2015 data from Eurostat

Table 3 Raising employment in care to 10% of employed population: employment generated and spending required under various wage scenarios


With wages in care at:


Current level

Raised by 24% for all care workers

Raised by 45% for new care workers (24% for existing)

Raised by 45% for all care workers

Total number of jobs generated





  of which % for women





Effect on gender employment gap (% pts)





Effect on total employment rate (% pts)





Gross spending required (% GDP)





Net spending (% GDP)





Multiple of total employment created for same net spending on construction






Source: Calculations by Jerome De Henau for WBG, based on 2015 data from Eurostat

Chart 1. Employment effects of investing the same net amount in care and in construction

Source: Calculations by Jerome De Henau for WBG, based on 2015 data from Eurostat