How the Care Economy Fuels National Economic Growth

Every day, billions of hours go into cooking meals, caring for children, cleaning homes, and supporting elderly family members. This work keeps households running and economies functioning. Yet when governments calculate their national wealth and economic output, most of this labor doesn’t count. Unpaid care and domestic work represents between 10 and 39 percent of GDP globally, yet it remains invisible in official economic statistics. Understanding how the care economy fuels national economic growth requires looking beyond traditional measures to see the full picture of what truly drives prosperity.

The economic value of unpaid care work 🔗

The numbers tell a striking story. Globally, around 16.4 billion hours are devoted to unpaid care work daily, equivalent to 2 billion people working full-time with no remuneration. If this work were compensated at minimum wage rates, it would represent 9 percent of global GDP, amounting to $11 trillion.

This contribution varies significantly across regions. In Latin America and the Caribbean, unpaid care work represents approximately 21.4 percent of GDP, while in some countries this figure reaches over 40 percent. India’s unpaid care work is estimated at 39 percent of GDP, demonstrating how this hidden labor forms a massive pillar of national economies.

The gender dimension cannot be ignored. Women globally perform three-quarters of unpaid care work, dedicating an average of 4 hours and 25 minutes per day compared to men’s 1 hour and 23 minutes. Women’s contribution alone accounts for approximately 6.6 percent of global GDP, while men’s contribution stands at 2.4 percent.

How unpaid care work sustains labor markets 🔗

Care work makes all other jobs possible. When children are fed, clothed, and supervised, when elderly parents receive assistance with daily tasks, when homes are maintained and meals are prepared, other household members can participate in the paid workforce. This fundamental relationship between unpaid care and formal employment creates what economists call the backbone of labor markets.

Consider a simple reality: without someone caring for children, parents cannot go to work. Without eldercare, adult children must leave their jobs to provide support. In 2023, an estimated 708 million women worldwide were outside the labor force because of unpaid care responsibilities, representing a third of all working-age persons not participating in employment. Among women aged 25 to 54, two-thirds cite care as the reason for being outside the workforce.

Research demonstrates clear economic returns when this burden is addressed. Expanding access to childcare increases women’s labor force participation by about 1 percentage point initially, and this impact doubles over five years. A $1.3 trillion investment in social jobs such as the care economy would result in a $3.1 trillion GDP return and create more than 10 million jobs in the United States alone.

The workforce productivity connection runs deeper than mere participation rates. A well-functioning care economy contributes to a healthier workforce, creates jobs, and enhances productivity. When workers have adequate support for their care responsibilities, they experience less stress, fewer absences, and greater focus during work hours.

The dual burden and economic consequences 🔗

Many women face what researchers call the dual burden, combining paid employment with disproportionate unpaid care responsibilities. This creates significant economic consequences beyond immediate earnings. Family caregivers lose an estimated $300,000 in lifetime earnings, which reduces social security contributions, pension savings, and retirement security.

During the COVID-19 pandemic, this dynamic became starkly visible. Mothers were three times more likely than fathers to take on most additional unpaid care work following school closures, and many mothers left the labor force entirely. Women’s employment in Canada dropped to 55 percent in April 2020, the lowest level since the 1980s.

The risks of ignoring the care economy 🔗

When economic calculations exclude unpaid care work, the consequences extend far beyond statistical inaccuracy. Without unpaid services being measured and valued, predictions are likely to be faulty, models inaccurate, and development policies flawed.

Consider what happens when policymakers make decisions based on incomplete data. They cannot see that GDP ignores almost all non-monetary production, such as childcare or volunteerism, and the work done at home. This creates blind spots in understanding how the economy actually functions and who contributes to its operation.

Policy failures and misallocated resources 🔗

Fixation on GDP-oriented growth has led to government policies that directly harm women, particularly through austerity cuts to public services. When care work remains invisible, governments fail to invest adequately in childcare facilities, eldercare services, and family support systems. These gaps force individuals, predominantly women, to fill them through unpaid labor.

The economic modeling problems compound over time. When unpaid care work goes unmeasured, economists and planners cannot accurately forecast labor supply, understand productivity patterns, or design effective social policies. Reliance on data that excludes unpaid household services creates blind spots and misleads policy advice, causing policymakers to neglect valuable work already being performed.

The gender wage gap illustrates this dynamic clearly. Research confirms a statistically significant relationship between the gender gap in unpaid work and the gender wage gap. When women carry disproportionate care responsibilities, they often work part-time, take career breaks, or choose jobs with flexible hours but lower advancement opportunities. Traditional GDP metrics capture none of this structural inequality.

Including care work in national economic indicators 🔗

Several methodologies exist for integrating unpaid care work into economic measurements without completely overhauling existing systems. The most widely adopted approach uses satellite accounts.

Satellite accounts as a practical solution 🔗

The System of National Accounts recommends using satellite accounts to record unpaid household work, creating parallel systems that track this value using established methodologies while keeping traditional GDP measures intact for international comparisons. This approach allows countries to understand the full economic picture without disrupting decades of comparable data.

The United Kingdom’s Household Satellite Account found that unpaid household services were worth £1.7 trillion, or 61 percent of GDP in 2023. This figure peaked during the COVID-19 pandemic at 66 percent of GDP in 2020, revealing how crises shift work from formal to informal sectors.

Mexico established a Household Satellite Account to quantify unpaid care labor traditionally undertaken by women, enabling the government to develop more comprehensive economic policies. South Korea similarly developed satellite accounts using time-use survey data, which have been instrumental in recognizing the value of unpaid care work and addressing structural gender inequalities.

Valuation methods and time-use surveys 🔗

Two primary methods exist for valuing unpaid work. The replacement cost method calculates how much it would cost to hire someone to perform the same tasks-essentially asking what a cook, cleaner, or childcare worker would charge. The opportunity cost method estimates what the person could have earned in paid employment during those hours.

Both approaches require robust data collection through time-use surveys. SDG target 5.4 calls for investment in gender-disaggregated data collection and statistics on paid and unpaid care work, particularly time-use data. However, fewer than half of UN member states have conducted at least one time-use survey since 2000, leaving significant data gaps.

Countries that have implemented these surveys gain crucial insights. India’s first national Time Use Survey in 2019 revealed that women spent 305 minutes daily on unpaid domestic work, nearly six times more than men’s 56 minutes. This data provides the foundation for calculating economic contributions and designing targeted interventions.

Moving toward comprehensive economic measurement 🔗

Integrating care work into national accounts requires more than technical adjustments. It demands recognition that care work is work, that it must be valued and redistributed, and that care workers deserve compensation and representation. Several countries include unpaid care work as household satellite accounts of their national accounts, providing estimates of the total economic contribution.

The goal extends beyond measurement to transformation. Better data enables evidence-based policies on parental leave, childcare subsidies, eldercare support, and infrastructure investments. When policymakers can see that care work represents substantial economic value, they can make informed decisions about resource allocation and social support systems.

This integration also supports broader movements toward alternative measures of economic progress. While GDP measures market transactions, indicators like the Genuine Progress Indicator explicitly include additions for the value of household work and parenting, providing a more holistic view of societal well-being.

What do you think? How might your own community or country benefit from officially recognizing and measuring unpaid care work? What changes would you expect to see if economic policies were designed with the full value of care work in mind?

References

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