[Burning Issue] Care Economy

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The importance of care work is now widely acknowledged and covered in various international commitments such as the SDGs. However, the investment in the care economy has not matched the pace.

What is the care economy?

  • The care economy includes child care, elder care, and care for people who are ill or disabled and in need of assistance. That care is provided by home-based businesses, care centers, and individuals who work in the homes of those they care for.
  • The 2019 ILO report ‘A Quantum Leap for Gender Equality’ identified unpaid care work as the biggest impediment to women’s formal employment, as it engaged 21.7% of women between 18-54 years of age, as opposed to 1.7% of men.
  • A medium-term plan to increase public investment in care economy infrastructure offers India a credible instrument to meet multiple policy objectives.

Care work and Care Economy

A system that consists of activities and relationships involved in meeting the physical, emotional, and psychological aspects of care — remains an integral but undervalued component of economies all over the world, ensuring the welfare of communities. Care work can be direct or indirect, paid or unpaid, short-term (maternity needs) or long-term (care for the disabled and elderly).

Why is there an increasing demand for care work?

  • Individualization– The trend towards a culture of individualization from collectivism will lead to a higher proportion of dependent people.
  • Demographic Transition-  The proportion of elderly people in the population is rising slowly.
  • Climate change- Climate change has caused water scarcity and rural food distress which increases care burden on women and children.
  • The ILO estimates that doubling investment in care relative to 2015 levels would generate 117 million additional jobs by 2030.
  • According to the International Trade Union Confederation (2019), an investment of 2% GDP in care in India would create 11 million jobs, of which 32.5% would be garnered by women.
  • The relational nature of care also implies that these jobs are less likely to be automated.

What is the significance of the care economy?

  • Employment- An analysis by the Women’s Budget Group (2019) showed that if an additional 2% of the GDP was invested in the Indian health and care sector, 11 million additional jobs could be generated, nearly a third of which would go to women.
  • Greater investment in care services can create an additional 300 million jobs globally, many of which will be for women.
  • Development- This will help increase female labor force participation and advance Sustainable Development Goal (SDG) 8.
  • Lifting burden from women- A combination of childcare infrastructure and parental leave policies will offset the burden on women to facilitate higher maternal employment to population ratio.
  • Reducing Income inequalities- India’s average female daily wage was 59 % of the male wage in 1993-94 and improved to 72 %in 2018-19.
  • Gender-inclusive economic growth- Women’s unpaid work is valued at 3.1% of GDP in India. Recognizing AWWs, ANMs, ASHAs and domestic help (amongst others), as formal sector workers would allow their economic contribution to be counted in the GDP
  • Prevention of “occupational downgrading”- It will help women become less likely to end up with lower pay when looking for flexibility, or part-time roles owing to care work responsibilities.

What is the status of care services?

  • Women’s unpaid work is valued at 3.1% of GDP in India.
  • In recent years, South Asian countries such as India and Bangladesh have begun investing in physical infrastructure which would improve the provision of care services indirectly.
  • India’s Economic Survey 2018-19 anticipates three major shifts in public policy, auguring increased attention to the care economy-
  • Declining working-age population- It has called for suitable regional policies to accommodate inter-State migrant labor, increasing the retirement age in a phased manner, and provisioning pensions and other types of retirement benefits.
  • Declining school-going population- It has shifted the focus of the National Education Policy 2019 on the merger and consolidation of existing elementary schools and emphasizes on quality of school education.
  • An increase in healthy life expectancy has also called attention to developing geriatric care in public health.
  • Maternity leave- India offers 26 weeks of maternity leave, against the ILO’s standard mandate of 14 weeks.
  • Child care- India has a long history of mandating the provision of creches in factories and establishments but there is limited information on its actual implementation.

Gaps in the current policies?

  • Unorganized/ Informal sector- The maternity leave coverage extends to only a tiny proportion of women workers in formal employment in India, where 89% of employed women are in informal employment.
  • Paternity Leave- While increasingly being recognized as an enabler for better balance work and family responsibilities, it is not provided in many countries, including India.
  • Access to quality and affordable care- Quality Services such as childcare, elderly care and care for people with disabilities is a challenge workers with family responsibilities face globally.
  • Implementation gaps- While India has a long history of mandating the provision of crèches in factories and establishments, there is limited information on its actual implementation.
  • Domestic Workers- According to the Government’s 2019 estimates, 26 lakh of the 39 lakh domestic workers in India are female. They also face challenges in accessing decent work.

Way Forward

  1. Comprehensive care policies– Policies that meet SDGs and can be rooted in ILO’s ‘Decent Work Agenda’ principles that begin with recognizing the value of unpaid care work, reducing the drudgery of work, redistributing responsibilities of care work between women and men, remunerating care workers, and representing their concerns.
  2. Strategic Action Plan- In consultation with the relevant stakeholders, the government needs to conceptualize a strategy and action plan for improved care policies, care service provisions and decent working conditions for care workers.
  3. Public good- Care work should be viewed as a collective responsibility and public good.
  4. Investment- Investing in a combination of childcare infrastructure and parental leave policies will have higher maternal employment to population ratio.
  5. Increase spending- India spends less than 1% of its GDP on the care economy; increasing this percentage would unfurl a plethora of benefits for workers and the overall economy.
  6. 5 R framework- The ILO proposes a 5R framework for decent care work centered around achieving gender equality. It urges on Recognition, Reduction of unpaid care work, Redistribution of unpaid care work, Rewarding care workers and decent work and Representation in social dialogue and collective bargaining.


Comprehensive care policies demand increased state involvement in investing, formalizing, and regulating the care economy. In addition to providing care benefits, national accounts should also be sensitive to the contribution of unpaid care to economic growth. Gender-sensitive budgeting, satellite accounts, and tax policy are some of the ways in which economic policy can acknowledge and reward care work. Finally, the state would be an important arbiter in engaging with care workers to realize and expand their rights

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