PFC: Inclusive growth demands investments in the care economy
How might investing in the care economy transform not only individual lives but also the
economic trajectory of a nation?
Investing in the care economy is essential for inclusive growth, yet it remains under-recognized. Despite its vital role, representing approximately 9% of global GDP when unpaid time is factored in, care work remains largely invisible. CIPPEC Oct.15th 2024. The reason may lie in its historical undervaluation, as care duties have traditionally been performed by women without monetary compensation, sidelining its economic contribution.
The care economy is foundational to both economic growth and social welfare, underpinning societal functions by supporting working capacities, enabling health, and nurturing the next generation. Care work enables all other economic activities; without it, formal employment would be unattainable for many. Yet, care responsibilities, particularly for children and the elderly, are severely limiting womenʼs access to paid work, entrenching economic inequalities. 94% of persons missing out on paid work due to unpaid care work are women World Bank, 2021.
Early Childhood Care and Education ECCE is a prime example of the care economy’s potential. ECCE infrastructure not only prepares children for lifelong learning but also facilitates womenʼs entrance into the formal workforce, thereby supporting inclusive growth. This sector generates employment opportunities, stimulates demand for goods and services, and promotes democratic values through the collective governance of care
entities by staff, parents, and owners. Research and evaluations from the IMF, ILO, World Bank, World Economic Forum The Future of the Care Economy, 2024, OECD, and the EU underscore ECCE’s role in advancing Sustainable Development Goals SDGs), specifically those focused on education SDG 4, gender equality SDG 5, and decent work SDG 8.
Partnership for Change PfC has been actively involved in Early Childhood Care and Education ECCE initiatives since 2017, primarily supported by Norwegian private funding in partnership with Ethiopian ministries and other government stakeholders. Over the years, PfC has collaborated with the Ministry of Women and Social Affairs to develop Ethiopia’s first ECCE standards. It has also trained more than 470 daycare staff and equipped 39 childcare centres. Currently, PfC is collaborating with ELMA Philanthropies and the Addis Ababa City Administration to furnish 20 more public childcare centers.
To demonstrate best practices, PfC has established model childcare centres showcasing high-quality yet cost- effective childcare solutions. Beyond this, PfC is committed to strengthening the broader ECCE value chain by addressing resource needs. It has invested in an ECCE material production unit and, in collaboration with Sumuni (a local business development organization) and Amhara Bank, introduced a collateral-free financing system benefiting five businesses involved in nutrition and product development that directly impact the ECCE sector.
In a groundbreaking achievement, PfC also supported the development of Ethiopiaʼs first formal ECCE diploma program at Kotebe Teachers University and advised on national ECCE standards, a significant step toward legal recognition and nationwide implementation. This systemic change marks a milestone in governance andeducation policy.
Ethiopiaʼs experience illustrates that the care economy, represented here through ECCE initiatives, can thrive even in low-income countries, yielding a “triple winˮ Empowering women, fostering early childhood development, and creating substantial employment and growth.
The care economy, if supported, holds transformative potential for economic inclusivity, sustainable growth, and broad societal benefit.
Author credit: Arni Hole, Birikit Terefe, Oscar Haugejorden