Join the Economics of Care webinar series
23 April 2024
23 April 2024
23 April 2024
A New Vision
Care economy consists of labour and services that support caregiving in all its forms. It represents a new vision of economics that recognises the importance of care work, empowerment and autonomy of women to the functioning of the economies, wellbeing of societies and life sustainability.
The care economy includes both unpaid and paid care work, carried out by people who are formally trained or not, for instance childcare and breastfeeding, care for the elderly, care for persons with disabilities, etc. It also includes value chains that rely on care workers, such as healthcare, domestic care, childcare, etc. as well as care-relevant infrastructures, services and technology, such as facilities and applications to mobilise and perform care services.
Big, with a cause
Investing in the care economy is big business, it is also critical to improving educational, employment and wellbeing outcomes.
In Indonesia, the ILO found that investing in universal childcare and long-term care services in Indonesia will generate almost 10.4 million jobs by 2035. This research also showed that investment in an universal and comprehensive care policy package could reduce the gender gap in employment rates by 5.5 percentage points, translating into an increase in women’s employment rate from 40% to 56.8% by 2035.
While the labour force participation gaps in Australia are less stark in comparison, uneven distribution of unpaid care work also negatively impacts women’s participation in the workforce and the quality of their employment; women’s participation rate is 68.9% and they are three times more represented in part-time employment roles than men.
Asian-Pacific women perform more than four times the unpaid care work conducted by men.
In Australia, women spend 64% of their time on unpaid care work compared to 36% for men.
In Australia, women spend 64% of their time on unpaid care work compared to 36% for men.
Powering up the potential for bilateral trade and investment
Despite the massive potential economic and social returns and the fact that it cuts across several economic sectors relevant to IA-CEPA and has a strong digital and skills components, the care economy, as an investment category, is not well known to investors in Australia or Indonesia.
Bilateral trade in care economy goods and services is well below potential. Recent research by Value for Women finds that there are several factors which inhibit investor engagement in the care economy: 1) no clear definition of the care economy; 2) limited market data available; 3) social structures and norms limit market development; 4) gender finance gap for women-led businesses; and 5) perceived riskiness of the investment category. Several of these obstacles are also relevant explanations for the limited trade activity in care economy.
The care economy and care policies are integral part of a conducive business environment. They can be gender transformative, enabling women to have a better access to quality jobs, resources, capacities and entrepreneurship. This is the case from two perspectives.
First, the formal care economy sector is female-dominated and sectoral reforms will quantitatively benefit women.
Second, care policies make qualitative improvements, which in the first place benefit women, who can reduce the time and resources they allocate to unpaid care work and reallocate them to other activities such as establishing a business, entering the formal labour market or training to improve their skills.
