Economic Growth

Why caring about the care economy is key to growth and well-being

a young child plays in the foreground while their mother is a computer in a blog about the care economy

The burden of both paid and unpaid care work falls disproportionately on women. Image: Getty Images

Gala Díaz Langou
Executive Director, CIPPEC (Centre for the Implementation of Public Policies for Equity and Growth)
Diana Rodriguez Franco
Special Adviser, Gender and Diversity, Inter-American Development Bank
  • The care economy not only sustains human activity for current and future generations, but also safeguards the right to both care and receive care.
  • Unpaid care work, if compensated, would represent 9% of global GDP, yet the social and economic value of the care economy remains mostly invisible.
  • We should prioritize the care economy at macroeconomic, policy and cultural levels from a holistic approach to build equitable and sustainable growth.

The care economy is at the core of growth, well-being and human development because it sustains human activity for current and future generations. Estimates show that unpaid care work, if compensated, would represent 9% of global gross domestic product (GDP), equivalent to $11 trillion.

In Latin America alone, it would signify between 15.7% and 24.2% of regional GDP, constituting one of the largest contributors to the economy over most of the other individual industries.

Yet despite the importance of care, the social and economic value of the care economy remains mostly invisible. Care is what makes all other jobs possible, as it encompasses relationships, services and both paid and unpaid work that make lives possible.

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Individuals in formal sector employment in companies and governments, for example, can work because children, older adults and their loved ones in need of care are being cared for. If this care work did not take place, it would be virtually impossible to be employed outside of the home.

Not only is care indispensable for the rest of the economy to work, care work in and of itself is an untapped source of employment which is growing. Investing in care creates jobs.

According to the World Economic Forum’s The Future of the Care Economy report, a $1.3 trillion investment in social jobs such as the care economy would result in a $3.1 trillion GDP return and the creation of more than 10 million jobs in the US.

As fertility rates drop and longevity increases, a larger population of older adults will need care givers and services.

An equitable care economy is one that reduces gender gaps

The burden of both paid and unpaid care work falls disproportionately on women, constituting one of the main drivers of inequality. Women globally spend on average, three times more hours than men on care work, but this figure hides differences between countries.

In some Latin American countries, this gap widens, with women spending up to seven times as much time on unpaid domestic and care tasks. In other developing economies, such as India, women dedicate eight times more hours than their male counterparts to these tasks.

Due to such unequal distribution, care also represents one of the main obstacles for women to achieve full participation in the economy, because the care burden limits their time in the labour market. Care is considered a responsibility of households and, within them, of women, and is therefore taken for granted as an exclusively “women’s issue”.

Unless we distribute care more equitably and overcome the idea of women as “natural” care givers responsible for most aspects of the paid and unpaid care workload in households and in the workforce, gender inequalities will persist in households and in the labour market.

We need to close the gender gap to make care work decent and to ensure a future of decent work for men and women. But we must also acknowledge that we will not grow unless we do so: closing gender care gaps would generate significant economic returns, and further boost employment, consumption, tax revenues and growth levels.

Incorporating men into care giving tasks is indispensable to break gender stereotypes and socially assigned roles and enhance women’s access to opportunities. Women will be left behind if they are not released from the time poverty that leaves them with limited or no time to study, go to the doctor, work outside of the home, exercise or participate in any activities that are not domestic or care related.

Why investing in the care economy is for everyone's benefit

Here’s what we need to do about the care economy if we care about growth, well-being and human development.

  • We need to recognize, redistribute, reduce, renumerate, represent and design comprehensive care systems. Care responsibilities should be redistributed within the household and through comprehensive care systems, the public sector, private sector, and local communities should take-on more active roles. Care is not exclusively a household responsibility. As we can see in Care Blocks, or Manzanas del Cuidado, in Colombia and Utopias in Mexico, comprehensive care services provision can be highly effective and equitable, particularly when these responsibilities are shared with national and subnational public sector, the private sector and distributed within the family.
  • Care is part of a cultural transformation for greater gender equality. Care is something that can be taught and learned and is not exclusively the role or responsibility of women. When we recognize that men play a role in care, we can reduce violence and increase empathy, creating more inclusive models of masculinity, as shown by Equimundo. Fostering men’s involvement in parenting and guaranteeing their right to caregiving increases children’s development. The cultural transformation can be accelerated through concrete policies, such as leave schemes based on shared caregiving responsibility between all responsible adults.
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  • Care economies need to be taken into consideration when calculating GDP. We need better estimates of care and the contributions of women to the economy. Designing and adopting specific care indicators will lead to a more comprehensive analysis of GDP that also helps to identify care deficits. The use of technology such as geo-referenced maps of care can inform public policy. Indicators, such as the Basic Care Basket contribute to greater efficiencies in the allocation of public resources, enhance care systems and make unpaid care work more visible throughout our economies.

We must prioritize the care economy at the macroeconomic, policy and cultural levels. If we do not address the care economy directly, every other investment and effort is bound to fail.

The success of this holistic and integral approach to the care economy depends on government, businesses and communities working together. To attain equitable and sustainable growth we need to guarantee the right to care and the right to receive care.

The authors appreciate the contribution of Sofía Fernandez Crespo, Chief of Staff at CIPPEC, to this article.

Gala Díaz Langou is a member of the Global Future Council on the Future of Growth and Diana Rodriguez Franco is a member of the Global Future Council on the Future of the Care Economy.

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