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Childcare policy

Closing childcare policy gaps offers high return on investment

There is a compelling social investment and gender equality case for transforming childcare policies so that they universally and effectively cover children from birth until the start of mandatory primary education, new ILO research has found.

Press release | 26 October 2023
© Russell Watkins / DFID
GENEVA (ILO News) – Providing continuous childcare to parents from the birth of their child to the start of compulsory primary education – to close the so-called childcare policy gap – could bring a return on investment (ROI) of more than US$3.7 for every dollar invested, according to a new brief from the International Labour Organization.

Such investments could also lead to reductions in gender and other inequalities, generation of decent jobs, improvements in health and wellbeing, and help create a path to social justice.

The study covering 82 countries finds that one US dollar invested in closing this childcare policy gap could result in an average increase of US$3.76 in global Gross Domestic Product (GDP) by 2035. It could also reduce the global gender gap in monthly earnings from 20.1 per cent in 2019 to 8 per cent in 2035; and increase women’s employment to a global average of 56.5 per cent in 2035, up from 46.2 per cent in 2019.

Such investment also has the potential to create around 300 million jobs by 2035, including 96 million direct jobs in childcare, 1.36 million direct jobs in long-term care and 67 million indirect jobs in non-care sectors, the brief says.

Providing universal, high-quality, childcare services staffed by trained and valued early childhood education personnel would require additional spending equivalent to 1.5 per cent of global GDP, on top of the current public spending of 0.3 per cent of global GDP and this does not consider the additional taxes that would be collected from the increase in formal employment.

The childcare policy gap refers to the period between the end of statutory childcare-related leave and the starting age for free, universal early childhood care and education or primary education. Currently, this averages approximately 4.2 years globally. Maternity, paternity and combined parental leave available to households average 6.1 months globally, while the average starting age for free and universal early childhood care and education is 4.7 years. The gap affects 90 per cent of actual and potential parents (nearly 3.5 billion people) worldwide.

The childcare policy gap creates a major structural barrier for both women and men, although women tend to be affected more. Hence, addressing the childcare policy gap has enormous potential for gender equality, particularly in employment and earnings. It’s estimated that 84 per cent of total net employment created by closing the policy gap would go to women, as they exchange unpaid care work for paid and formal employment.

The brief, The benefits of investing in transformative childcare policy packages towards gender equality and social justice, is based on findings from the new ILO Care Policy Investment Simulator, the largest online care policy modelling tool. It simulates the effects of providing a care investment package to close the childcare policy gap and calculates the investment requirements and the effects on job generation, gender employment and wage gaps.

The brief lays out a number of policy responses that are aligned with international labour standards needed to support the care economy transformation, which are also detailed in the new online ILO Global Care Policy Portal, which presents the status of national care policies. These policies include national social dialogues that engage with those who provide and receive care and using these to design rights-based programmes; building fiscal, regulatory and technical capacity; promoting understanding of the benefits of investment in care polices and jobs, and strengthening the capacity of governments, employers and workers organizations.