New analysis finds that enhanced ECEC investment will help women and the economy

A new analysis, undertaken by Associate Professor Elizabeth Hill from the University of Sydney’s Department of Political Economy, has found that an enhanced investment in ‘care’ sectors such as early childhood education and care (ECEC) and health will simultaneously help women and the economy as Australia looks to recover from COVID-19. 

 

Describing two policy levers which “could be pulled” to aid Australia’s flailing economy (investment in social infrastructure such as education, health and care, and greater subsidies for ECEC), Associate Professor Hill said, if implemented, these policies would boost employment and improve gender inequalities in the labour market, improving conditions for women. 

 

Women, the analysis notes, have been disproportionately economically affected by the pandemic, as they are over-represented in lower-paid, insecure and casual jobs, with women’s employment contracting by 7.4 per cent between February and May 2020, compared with 5.6 percent for men, equating to 457,000 jobs lost by women.

 

Without intervention, it is likely that this pattern will deepen amid the prolonged economic downturn.

 

“Implementing policies that address circumstances predominantly faced by women will therefore benefit the economy at large” she added. 

 

Published by the Committee for Economic Development of Australia (CEDA), the analysis proposes two strategies for economic recovery that reflect the contemporary structure of the economy; generate maximum employment outcomes per investment dollar, and include women.

 

More investment in early childhood education and care a ‘triple win’

 

One of the core arguments reached by Associate Professor Hill in her analysis is that increased investment in ECEC is a “triple-win” strategy that will:

 

• generate billions of dollars in national wealth and boost GDP while supporting women’s employment;
• increase demand for the sector’s services, creating more jobs; and
• allow for universal access, promoting all children’s education, wellbeing and life chances.

 

“Affordable early childhood education and care (ECEC) is critical for the economy at all times, but especially now. This was demonstrated by the government’s free childcare package – introduced in April, but now prematurely ended,” the Associate Professor added.

 

“There is particular concern that where the out-of-pocket cost of ECEC for families facing unemployment or significant economic insecurity remains high, it will be women who forgo employment and undertake child and other care duties.”

 

“Results from initial surveys by the sector confirm this possibility and suggest current ECEC policy will not support a dynamic and gender inclusive economic recovery.”

 

Stimulus can also be targeted for gender equity

 

Thus far, economic stimulus measures have focused on large-scale physical infrastructure projects (which largely employ men), however new research shows that there are more employment-intensive and gender equitable forms of stimulus. 

 

For example, a study of seven OECD countries shows that public investment equal to one percent of GDP in labour intensive care industries generates more total employment than investment in construction. If applied to the Australian market, it is estimated that this employment ratio would be nearly five to one.

 

“This is not to suggest that stimulus should not be made in construction; only that the government should take a more balanced approach to fiscal policy,” Associate Professor Hill said.

 

Integrated approach 

 

“These strategies do not stand alone,” Associate Professor Hill emphasised.

 

“They must be supported by two further measures: women’s inclusion in recovery planning leadership, and gendered employment analyses of all recovery policy options, including the impact of policy on unpaid work.”

 

“Unpaid work must be included given its massive contribution to economic growth and productivity. Failure to do so will distort policy making.”

 

To access the research, please see here.