The Need for Global Childcare Investment

The global impact of the lack of care resources, and why it matters.

The World Bank Group’s report, “Better Jobs and Brighter Futures: Investing in Childcare to Build Human Capital” (“Better Jobs Report”) provided some concerning statistics. It found that almost 350 million children living in low- and medium-income countries and below primary school age need childcare but don’t have access to it. 

Meanwhile, research showing that access to affordable childcare leads to much-needed economic benefits continues to mount. In the United States and abroad, recent studies measuring the impact of the Covid-19 pandemic on childcare and women support this connection.

Clearly, when it comes to childcare and the economy, the two can’t be untangled. If we want to improve our economies, we must invest in childcare at the global level.

What is Childcare Investment? 

The University of Pennsylvania Center for Impact Philosophy’s Early Childhood Toolkit (“Early Childhood Toolkit”) describes investing in early childhood as investing money in early care and education for “monetary gains and savings”. Financially speaking, these gains and savings might be called the investor’s return on investment (ROI). 

More specifically, investments in childcare are investments in childcare services that allow working parents to attend work and pursue their careers. Investments may be government funds or tax benefits, non-profit funding, subsidies, or employee care benefits. 

Why It Matters

Childcare investment matters because it benefits children, parents, and society. From a business leader’s or economist’s perspective, it matters because these benefits ultimately create monetary gains and savings.

Low Childcare Investment Impacts Women, Communities of Color and Low-Income Families More

Low investments in childcare lead to fewer affordable childcare options for parents. This lack impacts women, communities of color, and low- and middle-income families more than others on a global scale. 

The Global Impact on Women

American Progress reported that even though women play an important role in multiple industries, they don’t make enough to pay for child care. In the US, childcare can range from $10,000 to $29,000.

Unfortunately, studies completed before and during the pandemic show that when childcare is unavailable, women are negatively impacted much more than men. For example, the Gates Foundation found that globally,​ in 2018, 606 million working-age women could not work because of childcare responsibilities. Only 41 million men reported the same.

In this same report, every country surveyed reported that more women than men left the workforce during the Covid-19 pandemic. This signals a widening gender gap in the global labor force. The pandemic also increased the already existing pay gap between men and women. 

High-Income vs. Low-Income Families

Low childcare investments impact low-income families more because they’re less likely to be able to pay for licensed childcare. According to a 2019 American Progress report, low-income families use licensed childcare at a rate four times lower than high-income families. 

For these same reasons, the rates of return on childcare investments are higher for low-income families since childcare costs make up a larger percentage of their total income.

The Impact on Communities of Color

Correlations between family wealth/family income, access to childcare, and race still exist. American Progress’s 2019 report found that white families have higher rates of access to licensed childcare than Latinx, Black, and Asian families. Notably, about half as many Latinx families as white families had access to licensed childcare. 

Benefits of Childcare Investment

Children

Children directly benefit the most from affordable childcare. The Better Jobs Report found that children with access to quality childcare have better child development outcomes in the following areas: 

• School readiness
• Nutritional health
• Early childhood education and outcomes
• Employment prospects

Access to high-quality childcare is even more important for children under the age of five. This is because young children are in their most important developmental years. Childcare for this age group is also usually more expensive.

Women

With affordable childcare, families are better equipped to encourage and support women family members. And, women have more opportunities to pursue their careers. Higher participation rates in the workforce then increase equity.

Families

The Better Jobs Report showed that working families also benefit. First, access to childcare allows caretaking parents to work, thereby increasing family income and buying power. 

Second, older siblings who may have otherwise been given care responsibilities are better able to focus on their development. This includes women family members who may have otherwise taken on the brunt of childcare responsibilities.

Society and the Economy

The Early Childhood Toolkit names many societal and economic returns on childcare investment. Most directly, improving child welfare through affordable childcare and early education reduces future costs on interventions. Interventions include programmings like special education or grade repetition. It also increases disposable family income.

Increased child welfare and disposable income also have ripple effects on the economy, like increased earning capacity, family wealth, and job creation. 

How to Make an Impact 

Advocate for Child Care Subsidies and Financial Assistance

The Gates Foundation found that gender gaps cost countries that belong to the Organisation for Economic Co-Operation and Development (OECD) about 15% of their GDPs. Still, less than one-third of countries have created policy measures to address it.

Whether through subsidies like economic impact payments, or state or federal tax credits, countries must address unpaid care to make progress. If countries want to increase childcare access, they must advocate for policy.

Increase Employee Benefits

Employee care benefits provided by employers must play a role in helping working parents afford childcare—especially mothers. Types of employee care benefits include: 

• Childcare subsidies
• Pre-tax dependent care savings accounts 
• Childcare vouchers
• On-site childcare
• In-network childcare discounts
• Paid leave