Close up of woman using a walker

The world outside my study is churning and whirling… as it is engulfed with the fast-evolving health situations in communities around the globe. There are many unknowns about the
COVID-19 illness that has spread rapidly in every continent and the presence of uncertainty—big time—has rattled governments, shaken markets, and upended our daily routines, to say the least.

While I join the hundreds of millions of people who constantly check the news online and in newspapers, radio and/or tv, I also take time to pause.  These moments allow me to reflect on
what this difficult time that we are all experiencing means and what it says about us—as
individuals, as members of communities, and as citizens of the world.
For one, I find that:

  • each individual action has multitudes of rippling effects, large and small, on others;
  • the real world oscillates between predictability and unpredictability; it requires each of us to constantly assess the balance between taking caution and taking risk;
  • the distinction between self-interest and altruism (promoting others’ interests) becomes more blurred given the pervasive interconnectedness of our lives;
  • adaptation and flexibility are vital life skills that we need to have not just now but at all times;
  • we have the ability to change as we obtain more information and as conditions around us change; the notion of fixed tastes and preferences is outmoded;
  • the skills that we must hone and develop should prepare us not only to live in a competitive world but also to be able to work together, coordinate and cooperate with one another; for the greater good requires collective action.

As the impacts of the COVID-19 spread intensify, there is growing recognition among governments and the public that traditional efforts for dealing with shocks and managing risks
through conventional emergency responses are inadequate. Strategic thinking is needed as much as the ability to respond quickly and to take proactive measures. There is an urgent need to build the adaptive capacity and longer-term resilience of communities and societies.

One striking fact about the current global pandemic is its tremendous effect on the care sector. This includes not only the health care systems employing doctors, nurses, aides, and other health professionals but also the unpaid care labor provided by family members, neighbors, and kin.

Many are changing their daily life patterns to provide further assistance and care support for those who are vulnerable such as their parents or grandparents and for those who are self-quarantined. Many more are willing to take the risk of exposure to care for those who have tested positive and are ill but are staying at home because the healthcare system is inadequate, inaccessible, and/or overwhelmed. The shutdown of schools and daycare centers further adds demand for unpaid care. Parents are struggling to care for their children while at the same time trying to tele-work from home.

“How can I write or have meetings with my six-year old around?”

The cloak or mantle that hides the emerging crisis of social reproduction, or the under- provision of care for people who depend on it, is removed. This global pandemic exposes the heavy demand on those who carry the responsibility for providing care for the sick, the young and the frail elderly, the vast majority of whom have been women. It has upended preconceived notions such as: each individual is a ‘Robinson Crusoe’ in families that can find their own solutions to provide care, and that one’s ability to pay should determine who accesses care in the private sector.

The Care Work and the Economy Project joins the efforts of other organizations, research institutions and advocacy groups towards making the care sector visible to policymakers. The heavy care burden that is now being shouldered by health care systems, households, communities and countries throughout the world makes it imperative to bring care work out of statistical shadows and to remove the veil of ignorance in economic policymaking.

Let us hope that this time is truly different and that the jolt brought about by the current pandemic leads to more openness in the academic community and among policymakers towards a paradigm shift and policy change.

Maria S. Floro

March 2020

 

 

Close up of Hyun Lim LeeHyun Lim Lee, kindergarten teacher and organizer for the Childcare Workers Chapter of the Korean Confederation of Trade Unions, stood in front of the room full of civil society organization representatives and Korean and international researchers.  She is passionate about her job as a kindergarten teacher and passionate about the need to improve working conditions for caregivers in South Korea. She told the group about the challenges she faces as a kindergarten teacher, explaining how the high child-to-caregiver ratio and long hours without breaks make it difficult to provide quality care.  She shared how low pay and poor benefits have made it challenging to attract and retain early education teachers in the country.  Lee is one of 35 participants who came together on February 25, 2019 in Seoul, South Korea to kick-off a new project led by Care Work and the Economy (CWE-GAM) and its partner Seoul National University (SNU). The event brought together organizations working to support the power of care workers in South Korea with researchers from academia and the government to discuss the issues and challenges in getting care on the policy agenda to promote informed policies that enhance the quality of life of both those providing and receiving care.

Society Cannot Exist Without Care. The Economy Cannot Exist Without Care.

As Ito Peng, Professor at the University of Toronto, stressed at the February 25 kick-off conference: “Society cannot exist without care. The economy cannot exist without care.”  Caring for children, the elderly, and other dependents is a vital form of work that sustains human existence, enhances individual and broader societal well-being, and promotes sustainable development. Despite producing tremendous benefits for individuals, families, and communities, care work is enormously undervalued.  Peng’s concluding remarks at the conference highlighted how “we often say care is invisible, but what care workers shared with us at today’s conference shows that care is actually very visible – care is being provided all the time – it is just something people refuse to see.” This leaves paid formal caregivers, like Hyun Lim Lee, feeling underfunded and overstretched. And informal family caregivers, who are mostly women in South Korea and around the world, are left struggling to balance their care responsibilities with working conditions and career paths that tend to ignore other, non-work obligations.

CWE-GAM, a network of over 35 researchers, is producing new data and empirical evidence and developing policy tools to advance our understanding of care work, care arrangements, and policy impacts on growth, distribution, and gender equality in South Korea.  The project has undertaken a national survey of paid care workers (600 respondents) that includes a 24-hour time use diary, a nationally representative household survey of families responsible for caring for children and/or elderly (1,000 respondents), and in-depth interviews with caregivers and care recipients (90 respondents).  The research will provide rich information on paid caregivers – illuminating their working conditions, well-being, and providing detail on the types of activities they undertake.  The research also will provide robust data on families in South Korea and how they arrange, provide, and share care responsibilities within the household.  A signature output of this work is the development of new macroeconomic tools to guide decisions on fiscal policies and public investments to reduce and redistribute unpaid care work. The project will use our new data in conjunction with existing data to develop a macroeconomic model of South Korea that incorporates care to allow for a more comprehensive understanding of how specific social and economic policies impact economic, welfare and distributional outcomes.

To ensure that this research is used to inform policy design, implementation, and evaluation, CWE-GAM’s new project will convene civil society organizations, researchers, and policymakers over the next year.  The first conference on February 25 developed a strong dialogue between care and women’s rights focused civil society organizations, the broader research community in South Korea, and researchers concerned with issues of care and women’s and care workers’ rights internationally.  Representatives from more than 12 civil society organizations and researchers from four distinct universities as well as institutions like IOM Migration Research and Training Centre, Korea Women’s Development Institute, Korea Institute of Child Care and Education, and Population Association of Korea spent the day together to articulate and better understand the challenges facing South Korea in providing quality care as well as the challenges care workers face, ranging from issues related to well-being in their jobs to job and income insecurity.

The meeting was an incredible first-step in a long-term commitment to bring together research, civil society, and policy communities to advance the policy discussion on care in South Korea.  Over the next year, the CWE-GAM team, led by SNU, will convene several small group workshops around the country and will host two more interactive conferences as well as a high-profile policy dialogue in Seoul in the Spring of 2020.  The aim of the engagement is to:

    1. Support the strategic use of our research and build the capacity of groups to use research more effectively;
    2. Provide insights into the production of our research outputs and research-based materials; and
    3. Share research findings, policy recommendations, and strengthen relationships among groups and between the civil society, research, and policy communities;

The project aims to build connections among and between these communities. The hope is that working collaboratively to ensure we are producing the data and research needed by those on the frontlines working to change policy and practice will lead to more informed policies that better address the needs to those providing and receiving care.

Financial inclusion has been adopted as a developmental strategy with the roll-back of the developmental state under the neoliberal policy regime. As a result, mainstream private finance has utilized microcredit schemes with increasing frequency, even though such schemes initially were touted almost exclusively as tools for gender-empowerment and poverty alleviation. The relatively low rates of default in this sector have attracted an influx of funds from profit-oriented financial institutions, shifting focus from the sustainability of income generation for borrowers to that of the profitability of the lending institution. Given the higher transaction costs associated with small loans and extending outreach to marginal low-income households, this change has undermined the social mission of microfinance to reach the poorest and most neglected households. It appears social priorities are being subordinated to commercial considerations.

The impact of microcredit on both poverty and gender relations has been studied extensively. Yet the implications of microcredit growth for the care-economy, and their repercussions in the wider macro-economy, have received much less analytical attention. This neglect of care-labor provision in particular is surprising given that microfinance originally targeted female workers in rural areas in developing countries with less access to earning opportunities and disproportionate responsibility for care work. The increase in market labor implies a claim on the time of working women. In the absence of social provisioning of care, this claim on the labor time of women likely could lead to a squeeze on the time of rural working women.

We propose a simple two sector post-Keynesian model to integrate the role of demand and care work into the analysis of microfinance. This investigation demonstrates how micro-financed enterprises face a structural constraint on the demand-side from overall macroeconomic conditions. They likewise face a constraint on the supply side from the responsibility for unpaid care work borne by the female beneficiary of microfinance. Paradoxically, microfinance has been espoused as a developmental strategy in precisely the period when the role of the developmental state has been eclipsed and cutbacks in public spending on care provisioning have been prescribed.

Meanwhile, slowdowns in the wider economy lower the demand for the output of the microfinance sector, undermining the viability of these enterprises. The capacity of the microfinance sector to provide the impetus to broader demand growth in the economy therefore is likely to be more limited in the absence of public policies to stimulate demand and investment. The capacity of microfinance to alleviate poverty and lift incomes is thus dependent on conditions in, and linkages with, the wider macroeconomy. A vibrant and stable macroeconomy is the only sustainable basis for a stable microfinance sector.

We also draw attention to some of the complexities of the impact of microfinance for the provision of care. The home-based nature of microenterprise perpetuates the gendered asymmetries of care responsibility within the household. While higher female earnings can alleviate the burden of care by making care work more effective and by enabling the market to substitute for unpaid care, the gendered responsibility for care remains a critical constraint for the female beneficiary of microfinance at the lower income levels and in the context of inadequate social provision of care.

Some clear policy prescriptions emerge from this investigation. Donors and development agencies have been encouraging raising interest rates in order to ensure the viability and profitability of microfinance lenders. However, our model suggests that high interest rates will undermine the scope of microfinance as a path to better and sustainable livelihoods for poor households in rural areas. Higher interest rates in this sector impose a higher burden on the labor-time of the female worker with a consequent squeeze of care-labor or own-labor time.

More significantly, the analysis suggests that microfinance cannot be an effective path to poverty alleviation or gender empowerment, unless it is backed by investment in the social provisioning of care.  The success of microfinance as a developmental strategy depends on wider policies that support demand and the social provision of care. Ultimately, there is no substitute for a developmental strategy based on public investment in support of both job creation and social provision of care.

Girl playing with bubbles

The global financial crisis that began in 2008 resulted in the widespread destruction of jobs. Effects were felt disproportionately among subordinate racial groups and women. While mainstream analyses emphasize regulatory lapses in the financial sector as the principal factor triggering the crisis, the root causes run much deeper. Feminist and stratification economists have enlarged the lens of economists to explore the role that growing inequality played leading up to the crisis. Furthermore, they have made important contributions to the analysis of the macro-level impact of crisis and, with this, to macroeconomic theory and policy (for a detailed discussion, see Seguino 2019).

  1. Cuts to social spending and economic instability have long-term negative effects on human development and productivity, in part through the gender effects of crisis and austerity.

Women tend to bear greater responsibility than men when it comes to ensuring children receive proper care. They are also among the hardest hit by crises and austerity because they control fewer resources and are more concentrated in low-wage jobs that are insecure and lack benefits (Karamessini & Rubery 2013). Because of women’s predominant responsibility for social reproduction, these effects subsequently are transmitted to children—and the impact can be long-lasting. Neuroscience research over the last 20 years details the mechanisms by which this occurs, but economists have yet to recognize its lessons and significance (Katsnelson 2015; Hair et. al., 2016). Children’s brains are especially susceptible to neurobiological changes, and the effects are harsher on poorer than on wealthier families. A recent study shows, for example, that the brains of children and adolescents with higher family income and more parental education have larger surface areas than their poorer, less-educated peers (Noble et. al., 2015). The regions of the brain most affected are those associated with language, executive functioning, motional control, and memory, negatively impacting the development of children’s cognitive skills. These effects last well into adult life.

This research suggests that economists must redefine their conception and scope of hysteresis, or path dependence.  Until now, hysteresis only has been applied to the current labor force, but neuroscience research demonstrates the long-term effects of deprivation on the human brain, especially in children. The economic vulnerability of women and people of color affects children and thus long-run productivity growth. Many macroeconomists have not yet integrated this channel of productivity growth into macro models. Were they to do this, the problem of gender and racial inequality and the shredding of the social safety net would receive the attention they deserve as determinants of long-run growth.

  1. Targeted public investment can reduce intergroup inequalities and stimulate growth.

Time-use research finds that women are responsible—through gender norms and stereotypes—for a disproportionate share of unpaid work, comprised of care of self and others, and maintenance of the household. Women’s unpaid care burden, crucial for supporting and expanding human capacities of the current and future labor force, inhibits their participation in paid work. Women’s limited access to income, as a result, redounds negatively on children, given evidence of their greater (than male) responsibility for children’s well-being (Doss 2013). This points to the centrality of public investment to reduce women’s care burden.

A number of scholars have explored the gender effects of physical infrastructure investment (in, for example, sanitation, roads, and electricity) [Agénor et. al., 2010]. They find that such investments reduce women’s care burden, particularly in low-income countries where women spend a significant amount of time on unpaid work such as fetching water and firewood. Because these investments help to reduce time poverty (due to time spent on unpaid work), they expand women’s ability to take on paid work, which in turn increases their bargaining power in the household to direct resources to children, promoting long-run productivity growth as a result.

Similarly, physical infrastructure investments can be used to address racial inequalities. In developed countries, for example, residential segregation combines with infrastructure inequality, as the recent case of contaminated water in Flint, Michigan has shown. In addition, lead, asbestos, and chemical toxins worsen the health of children in those communities with life-long effects on their cognitive development and thus productivity. These conditions represent a key aspect of intergroup inequality. But they also have macroeconomic implications as a result of the effect on labor productivity and thus growth.

  1. Social infrastructure spending promotes gender equality, productivity growth, and creates fiscal space.

Keynesian economists emphasize the effect of government spending on aggregate demand and growth. Feminist heterodox economists take this further, underscoring the importance of strategically targeting government spending to achieve a broader set of goals, including gender and racial equality, and productivity growth. They thus contribute to an understanding of both the demand- and supply-side effects of government spending.

Targeting government spending to social infrastructure (which includes such sectors as childcare, education, and health) expands human capacities. Qualities that make human beings economically effective, such as emotional maturity, patience, self-confidence, and the ability to work in teams have a public goods quality with positive spillover effects on economy-wide productivity (Braunstein, et. al. 2011). Because care work (both paid and unpaid) is a highly gendered activity, with women providing the bulk of the labor, social infrastructure investment can improve women’s access to paid work.

In a recent study, Dehenau & Himmelweit (2016) assess the impact of a public investment of 2% of GDP to either the care or construction sector. They find that in the short-term, government spending targeted to the care sector reduces women’s unpaid work and creates more paid jobs than spending in the construction sector. In the medium term, wages in care sector rise. Given that this sector is one that is female-dominated in employment, the gender wage gap narrows. In the long term, productivity rises due to improvements in human capacities. Antonopoulos et. al. (2011) obtain similar results, with the added outcome that in the US, social service jobs have stronger positive effects on disadvantaged and poor workers (that is, women and people of color).

This spending also has the salutary effect of creating fiscal space over the medium run. As a result, feminist research highlights that it is useful substitute the term social spending with social infrastructure spending, because targeted spending on social infrastructure produces a stream of financial returns into the future due to impact on productivity and incomes. As such, using fiscal policy to promote gender and racial equality creates fiscal space. It is time for economists to begin thinking of such spending as an investment rather than merely as a form of discretionary spending, or a target for cuts during hard economic times.

Macroeconomists, and for that matter economists and policymakers more generally, can benefit from a greater focus on intergroup inequalities by race and gender. This is because macro policy has differential race, gender and class effects. Policies (and models) that fail to incorporate the dynamic effects of intergroup inequality can lead to unintended and harmful outcomes. And intergroup inequality in turn affects important macroeconomic outcomes, including employment and productivity growth.

On the policy side, while explicitly targeted gender and race policies may be helpful, it should be noted that policies that may appear to be gender and race neutral can nevertheless close gaps. For example, sector-specific fiscal spending, full-employment policies, capital controls that reduce volatility, and labor market regulations to address insecure work may benefit all workers but be particularly effective in improving the lives of people of color and women, all with simultaneous economy wide-benefits on productivity growth.

The bottom line:

For some macroeconomists, gender and racial inequality and the impact of macro policies on children may appear to be outside their realm of focus. They are encouraged to resist the temptation to focus their sights too narrowly. Just as class dynamics have macroeconomic implications as demonstrated by Kaleckian economists, so too do gender and race. The effects are not only on the demand side, but also on the supply side of the economy with important implications for fiscal policies that that ensure a path to equity-led growth.

This blog was authored by Stephanie Seguino.

REFERENCES

Agénor, P.-R, Canuto, O., & da Silva, L. P. (2010). On Gender and Growth: The Role of Intergenerational Health Externalities and Women’s Occupational Constraints. World Bank Policy Research Working Paper No. 5492.

Antonopoulos, R., Masterson, T., & Zacharias, A. (2011). Investing in Care: A Strategy for Effective and Equitable Job Creation. In Antonopoulos, A. (ed), Gender Perspectives and Gender Impacts of the Global Economic Crisis, London: Routledge, pp. 47-72.

Braunstein, E., van Staveren, I., & Tavani, D. (2011). Embedding Care and Unpaid Work in Macroeconomic Modeling: A Structuralist Approach. Feminist Economics 17(4), 5-31.

De Henau, J. & Himmelweit, S. (2016). Developing a Macro-Micro Model for Analysis of Gender Impacts of Public Policy. Paper presented at Gender and Macroeconomics: Current State of Research and Future Directions, Levy Economics Institute, Bard College, New York City, March 9, 2016.

Doss, C. (2013): Bargaining and Resource Allocation in Developing Countries. World Bank Research Observer 28(1): 52–78.

Hair, N., J. Hanson, B. Wolfe, and S. Pollak. (2105). “Association of Child Poverty, Brain Development, and Academic Achievement. JAMA Pediatrics 169(9), 822-829.

Karamessini, M. & Rubery, J. (2013). Women and Austerity: The Economic Crisis and the Future for Gender Equality, Routledge IAFFE Advances in Feminist Economics.

Katsnelson, A. (2015). News Feature: The Neuroscience of Poverty. Proceedings of the National Academy of Sciences 112(51), 15530-15532.

Noble, K., S. Houston, N. Brito, H. Bartsch, E. Kan, J. Kuperman, N. Akshoomoff, D. Amaral, C. Bloss, O. Libiger, N. Schork, S. Murray, B. Casey, L. Chang, T. Ernst, J. Frazier, J. Gruen, D. Kennedy, P. Van Zijl, S. Mostoofsky, W. Kaufmann, T. Kenet, A. Dale, T. Jernigan, & E. Sowell. (2015). Family Income, Parental Education and Brain Structure in Children and Adolescents. Nature Neuroscience, 18, 773–778.

Seguino, S. 2019 (forthcoming). Feminist and Stratification Theories: Lessons from the Crisis and Their Relevance for Post-Keynesian Theory. European Journal of Economics and Economic Policies.

Gendering Fiscal Policy

The importance of public physical infrastructure in stimulating productivity and economic performance is embraced by most economists. However, there is less awareness that public spending in health, social care, education, and childcare should be considered as investment in social infrastructure. We therefore develop a feminist post-Keynesian/post-Kaleckian demand-led growth model to elucidate the impact of gender equality and public spending in these social sectors within a theoretical framework. In particular, we use the model to analyse the effects of fiscal policies and decreasing the gender wage-gaps on GDP, productivity (GDP per employee), and employment of men and women in both the short run and long run.

Our analysis challenges conventional thinking about the impact of public spending in health, social care, education, and childcare. Day-to-day spending in these sectors (e.g. wages of teachers, nurses, or social care workers) is considered as “current spending” rather than as investment in our national accounts. However, public spending in these social sectors have long-term benefits to society, yielding substantial productivity impacts in all other sectors of the economy by increasing people’s skills, health, and innovative capacities.

Crucially, these social sectors improve gender equality and reverse one of the most persistent dimensions of inequality in our societies; they provide crucial services which are otherwise provided by the unpaid invisible domestic labour of women. Public supply of these services helps women to participate in social and economic life more equally. This in turn further increases productivity by unleashing the hidden potential of women. Moreover, in the current gendered, occupationally segregated labour markets, these sectors employ predominantly women. More public social spending consequently leads to closing the gender-gap in employment. As a result, these expenditures are labelled as “purple public investment” by feminist economists (İlkkaracan, 2013).

Recognizing the vast amount and importance of time women spend on unpaid care at the household, which is not accounted for in the standard national accounts and measures such as GDP, is crucial for designing policies to increase gender equality. A fiscal policy stance, which aims to publicly provide the necessary social services, would socialize part of these activities and radically decrease the amount of unpaid private care. For instance. universal free childcare and nurseries open for sufficiently long hours benefit both mothers and fathers by giving them an equal chance to balance work with other social, cultural, and political aspects of their lives. Meanwhile, provision of these resources also benefits society at large by decreasing inequality between children from different backgrounds and improving the creative capacity of children.  Of course, there always will be the need and desire for care provided by family members for children or the elderly in the domestic private sphere. Nevertheless, regulations such as parental leave for both mothers and fathers in addition to working time arrangements that facilitate combining care and work for both men and women should help to ensure that time for caring can be equally shared between men and women.

What, then, does this imply for fiscal policy and the setting of the budget deficit or public debt targets? Fiscal policy should be focused on the needs and well-being of society rather than aiming at a singular target for the sake of the deficit. The mainstream approach of limiting the governments’ fiscal space is based on a mistaken household analogy that the public sector should balance its budget just like any household has narrowed down the political space. Within this narrow space, the idea of a fiscal credibility rule suggests that spending on public investment can be funded by borrowing, while day-to-day spending is financed by tax revenues. Even under this limited fiscal space, the idea of defining public spending in universal health, social care, education, and childcare as investment in valuable social infrastructure would extend the scope so that fiscal policy could be financed by borrowing as well as by raising tax revenues. Furthermore, mainstream policies consider even public spending financed by increased taxation of income, wealth, and corporate profits as undesirable based on the myth that it would lead to low private investment and productivity in the long term. But this assessment is rather static as it totally ignores the positive impact of these policies on macroeconomic demand, and in turn on productivity and private investment.

Our macroeconomic model can form the basis for the empirical analysis of gender equality and fiscal policy on growth, productivity, and budget balance while also serving as a tool for policy analysis and gender-responsive budgeting. In particular, the model allows policy makers to analyse the impact of fiscal policy-based employment increases in health, social care, education, and childcare along with an upward convergence in wages in these public sector jobs with closing gender pay gaps. The model also anticipates public investment in social infrastructure to reduce women’s unpaid domestic care work, while increasing their labour supply and enabling them to spend more time in paid work. Aggregate demand is expected to be stimulated both in the short- and long-run via strong multiplier and productivity effects of public investment in social infrastructure. Higher employment and closing of the gender pay gaps via higher wages for women in the public social infrastructure sector is also expected to stimulate household consumption with positive demand effects for the economy. In the long run, government spending as well as higher wages of women are expected to increase productivity. Both the demand effects in the short-run and the long-term productivity effects, which further increase profitability, are expected to stimulate private investment as well.

Given the labour-intensive and domestic demand-oriented nature of social infrastructure and occupational segregation, such investment is expected to lead to very strong increases in the employment rates of women as well as to the creation of a substantial amount of jobs for men in all sectors of the economy due to spill-over effects of demand from the social sector to the rest of the economy. This policy thereby also contributes to closing the gender gaps in employment. Due to sectoral and occupational segregation, public spending in social infrastructure is expected to create more employment for women compared to physical infrastructure. According to empirical research based on input-output tables (Antonopoulos et al., 2010; İlkkaracan et al., 2015; De Henau et al., 2016; İlkkaracan and Kim, 2018), public investment in physical infrastructure creates fewer jobs in total, and most new jobs are predominantly male jobs. However, this research does not consider the long term effects on productivity. An empirical analysis of our model for a specific economy can further shed light on the gendered policy implications.

The expansionary effects of fiscal policy lead to higher tax revenues in the economy; hence, fiscal policy partially finances itself. The model can be used to simulate further policy-mix scenarios including increases in tax rates on capital or labour to ensure that public social infrastructure investment and closing gender gaps in these sectors can fully be financed.   Progressive taxation, which improves after-tax equality in terms of income and gender, is also important in the context of public spending on non means-tested services such as universal health and social care, education and childcare. A higher tax rate on higher incomes is a way of those who can afford contributing more towards universally provided public services.

 

References

Antonopoulos, R., K. Kim, T. Masterson and A. Zacharias (2010) ‘Investing in Care: A Strategy for Effective and Equitable Job Creation.’ Working Paper No.610. Levy Economics Institute

De Henau, J., Himmelweit, S. Łapniewska, Z. and Perrons, D., (2016) Investing in the Care Economy: A gender analysis of employment stimulus in seven OECD countries. Report by the UK Women’s Budget Group for the International Trade Union Confederation, Brussels. https://wbg.org.uk/wp-content/uploads/2016/11/De_Henau_Perrons_WBG_CareEconomy_ITUC_briefing_final.pdf

İlkkaracan, İ., 2013 ‘The Purple Economy: A Call for a New Economic Order Beyond the Green’, in U. Röhr and C. van Heemstra (eds), Sustainable Economy and Green Growth: Who Cares? LIFE e.V./German Federal Ministry for the Environment,  32–7.

İlkkaracan, İ., and Kim, K. 2019. The employment generation impact of meeting SDG targets in early childhood care, education, health and long-term care in 45 countries, Geneva, ILO, forthcoming

İlkkaracan, İ., Kim, K. and Kaya, T. (2015). The Impact of Public Investment in Social Care Services on Employment, Gender Equality, and Poverty: The Turkish Case. Research Project Report, Istanbul Technical University Women’s Studies Center in Science, Engineering and Technology and the Levy Economics Institute, in partnership with ILO and UNDP Turkey, and the UNDP and UN Women Regional Offices for Europe and Central Asia

 

Aerial view of Seoul, South Korea

South Korea has experienced rapid economic growth and accelerated industrialization and modernization within a relatively short period of time in the seventies and eighties (Jang, 2009). Social policies were heavily oriented in supporting the government’s development strategies in terms of increasing human capital and improving health through public investment in these sectors (Song, 2014). Through most of that period, families were encouraged to carry the entire burden of care work and childrearing responsibilities, and social policies played a minimal role in sharing this burden, being mainly targeted to very limited low-income groups. Furthermore, filial piety, called hyo, one of the Confucian ideologies that served as a dominant foundation of state philosophy before the modern era of South Korea, remained even after the establishment of modern government and functioned as an essential foothold in determining care responsibility, unloading it entirely to the family (Lee, 2017).

However, demographic shifts, government regime change, and democratization process highlighted the need to address issues of redistribution and welfare and the important role of the state. The concept of the state serving as the main care provider is now gaining more attention, with its importance highly underlined in the current era of low fertility rates and an aging population in South Korea. In response to increased social awareness and demands, the South Korean government has shown efforts to revalue care work and reach a range of families’ needs.

The major care policies that South Korea currently has in place are:

  • the Early Childhood Education and Care Policy,
  • the Long-Term Care Insurance (LTCI) Program,
  • the Maternity Protection Act, and
  • welfare policies for the disabled.

Gilbert and Neil (1974) in their book Dimensions of Social Welfare Policy introduced the idea that social provision can be divided into several types; power, cash, vouchers, time, services, and opportunity. The order of each type represents the degree of freedom of choice; for example, cash represents more freedom of choice compared to services. South Korea’s social and family policies have shown preference for expanding government provided care services, rather than developing social provision in the form of time or cash benefits. However, after recovering from economic crisis (1997-1998) and welfare reform (1999-2001), the Korean government has assumed greater responsibility by legislating, financing, and providing welfare, particularly childcare and elderly care, in public sectors, community level/local government sectors and also supporting the private care market sector. Promoting more care services supported the creation of more jobs in the care sector and allowed unpaid caregivers/housewives to enter labor force as paid careworkers.

South Korea’s social policy has gone through dramatic reforms recently, with the government moving its focus beyond the expansion of existing services towards creating policies (in the form of parental/emergency care leave as well as vouchers and allowances), which provide  not only services but also financial support to households who take care of dependent family members on their own.

Currently the basic model for childcare in South Korea is to provide government-supported daycare (9:00 am to 4:00 pm) and education for all children from the ages of 0-6 years. When the model was first introduced, there were several blind spots and families’ needs were not always met. For example, early morning and late-night care (i.e. after 5:00 pm) was not provided. Korean society is notorious for long workhours for employed individuals, and the model doesn’t allow many dual-earner parents to both remain in full-time employment or the model requires them to find additional, often costly, care services. Over the last few years off-hours (7:00 am to 10:00 pm) care services were created and expanded to meet these unmet care needs. In addition, to prevent sole-care burden (“독박육아”, dok-bak-yook-a) among those who raise children alone at home, community-based childcare services for unpaid caregivers (e.g. housewives) were developed by local government subsidies. The prime objective of this service was to create a space for sharing childcare information within the community; engaging in education and entertainment together; and for lessening the burden of care, through services like childcare centers and co-parenting cafés.

Although the government (both central and local) expanded social policy significantly and provided huge amounts of subsidies for these services, several policymakers and researchers point out that parents or caregivers still feel burdened with care for their children and a great proportion of the expenses are still paid by the users.. For most social services, middle-class families are not eligible or only receive partial benefits since these programs mainly target low income families.

Even though the government has expanded social welfare programs since 2000, this was not in effect to impact the fertility rate. Therefore, the service-based childcare model has brought about discussion and debate in South Korea, as people tend to recognize that public services cannot meet the various needs of every family in the country. For example, for child care services, there has been debate on whether or not it is good for young children to stay 7-10 hours in a daycare center. Some scholars have also argued that there is a need to support caring for children “at home” or providing services in a “home-like” environment (Lee and Kim. 2011).

South Korea is also facing a “parental rights movement”, with advocates promoting family time and quality time for caring for children. Providing “time” for parents is the solution they feel will help parents the most. To provide higher flexibility for dual-earner parents who at the same time want to take care of their children by themselves, the government has pushed for a full year paid parental leave program. This was designed to give additional leave to parents who get 90 days maternity leave (fully paid) if they give birth. Both employed mothers and fathers can use full year parental leave until one child gets to age 9, respectively. This leave program guarantees about 50% of personal monthly income (although there is a ceiling for the income compensation). Although this full year parental leave program started in early 2000, it had been rarely practiced, as employers and sometimes even employees were reluctant to use it. However, to boost the low fertility rate, the government is now pushing for parents with young children to actually use this program. This is done by subsidizing (relieving company tax, spending direct financial funds), both in public sectors and private companies. According to labor statistics (2017) only 34,898 mothers and 502 fathers used parental leave in the year 2009, while, in 2017, the number of parents using the leave almost doubled for mothers (78,080) and increased dramatically for fathers (12,043).

In addition to parental leave policies, a financial benefit (age 0-5 years) starting from July 2018 will be provided to families with young children, with the eligibility set by their income level.

Compared to childcare, eldercare provision in South Korea has a shorter history. In 2008, the issue of eldercare gained greater attention, due in large part to the rapid growth of the elderly population and increase in life expectancies.  A state-supported model of eldercare was developed as a result. The primary eldercare provision comes from long-term care insurance (LTCI), which allows all elderly with care needs access to non-live-in domiciliary (e.g. home helper services) and community and institutional-based care services, delivered by public and/or private for- and not-for-profit service providers. Unfortunately, the LTCI covered only 7.5 percent of total elderly population (age 65+) in South Korea, according to 2016 statistics (retrieved; http://www.longtermcare.or.kr/npb), while in Japan the eligibility rate is 18.4% and 15.2% in Germany. Despite the low percentage of elderly reached, 2017 statistics show that available eldercare services (both in-home service and institutional- based service) are being used by eligible beneficiaries, 84% and 64% capacity rate. Those who are not eligible for the LTCI are able to access comparable elderly care services within the community-based elderly care providers, which are partly supported by public voucher service, but mostly the cost is paid by individual families (Oh 2014: 1166).

Unlike childcare provision, where not only services but also time and money are given to families with young children, the South Korean eldercare model focuses more narrowly on direct service provision. The LTCI sometimes financed a family member who cares for dependent elderly parents if the adult child acquires a certificate of qualification for in-home eldercare, which is very rare. This feature was introduced to support elderly care in rural areas where in-home care workers or facilities are scarce. Meanwhile, it was expanded, later on, to urban areas (Yoon, 2014) to encourage some unpaid family caregivers to obtain care certificates that enable them to take care of their own parents in a more professional settings and earn a small income. Recently, however, the government announced that they will cut down on such family allowances, which could cause a devastating situation for those family caregivers. In order to compensate their income loss, it will be necessary to get a second job as a care provider and care for other non-family members or seek part-time jobs.

In regard to out-of-pocket expenses, even those families who are eligible for the LTCI benefit are required to pay a copayment. Currently, LTCI covers about 80% for institutional care and 85% for in-home-based care (copayment 20% and 15% respectively).  Adult children’s income, commonly from paid full time and part-time work, is needed for caring for their elderly parents, which might drain their time available to care for their parents. Moreover, last year in 2017, the Korean government raised the LTCI payment rate (insurance fee) as well as the copayment rate due to the wage increase for paid caregivers in the LTCI sector, which will likely reinforce the issues described above. Yet, the government announced that they will support low to middle income families by subsidizing the out-of-pocket cost.

In terms of providing leave for caring for dependent elderly, this is much more limited than cash allowance policies. Employed individuals could apply for leave (full 90 days) for a limited period to take care of their parents. However, family leave for eldercare is mostly unpaid, which is very different from parental leave that provides partial income.  The low fertility rates among young couples in Korea encouraged policymakers to adopt family-friendly parental leave policies. Unfortunately, although demographic shifts in Korea are a concern (the country is the world’s fastest-aging developed economy), policymakers have not felt the same incentives and pressure to create comprehensive leave policies to enable families to take care of dependent elderly on their own.

As the preceding discussion demonstrates, developing care models in South Korea has been a continuous process, with the government creating policies in quick response to urgent issues and challenges of the time.  Despite the expansion in social care provisioning there remains questions of their impact on care recipients and their families. We have little information on how families navigate through the public and private care provision and make decisions about caring for dependent children and elderly family members. The issue of how families choose among different care delivery arrangements and to what extent they are able to combine public provision with their own private resources (i.e. time and money) to meet care needs has not been addressed. To date, little is known on how paid caregivers and unpaid family members develop relationships and emotional bonds with care recipients (i.e. child or elderly), and the linkages between paid and unpaid care work.

We argue that, without a comprehensive framework and a strong view on care, welfare and development, care policies in South Korea have yet to achieve the requisite level of recognition and effective utilization. There is still room for improvement to better meet the needs of families and redistribute responsibilities of care between private households and the public.

This blog was authored by Seung-Eun Cha, Hyuna Moon & Eunhye Kang

 

References

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Choi, In-Duck. (2014). A Study on the co-payment and the effect of long-term care insurance utilization by income level and region type. Journal of Community Welfare. 48: 135-164.

Hwangbo, Young Ran. (2014). A Historical review of the infant and child care act: Based on the characteristic of the law and the law system. Journal for Early Childhood Education and Care 9(2): 125-146.

Jang, Kyung-sup (2009). Family, Life course, Politics and Economy: Compressed Modernity Seoul: Changbi.

Kim Eun-jeong and Lee Hye-suk. (2016.) Evaluation of the Impact of Child Care Subsidy Program. Korean Institute for Health and Social Affairs.

Lee Meejin. (2017). Change on the family structure and policy for elderly care. Social Welfare & Social Work, 219:20-28.

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Oh, Young-ran. (2014). “A Study to establish social safety net of Elderly LTCI : Implication from the community inclusive care in Japan. Critical Social Welfare Academy Conference Presentation Paper. October 2014. 1166-1185.

Peng, Ito. (2009). Paid Care Workers in the Republic of Korea. UNRISD Research report 4, New York, UNRISD.

Peng, Ito. (2011). The good, the bad and the confusing: The political economy of social care expansion in South Korea. Development and Change42(4), 905-923.

Song, Da-young. (2014). Socializing of Caring and Delay of the Welfare State in Korea, Journal of Korean Women’s Studies 30(4):119-152.

Yoon, J. (2014). Counting care work in social policy: Valuing unpaid child-and eldercare in Korea. Feminist Economics20(2), 65-89.