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Fund social care and childcare to create jobs for women and solve UK's productivity crisis, finds study

The UK’s productivity - a measure of how efficient its workforce is – lags behind other European countries, and is still well below 2008 recession levels. At the same time recent gender pay gap reporting shows that men earn on average almost 20% more than women. 

A new study suggests that these two problems are linked, and that gender equality is key to solving the UK’s productivity crisis. The findings show a clear link between investment in childcare and social care and productivity over both the short and long term, a trend attributed in part to in part to freeing up the female workforce. 

The study will be presented at an event as part of the ESRC's 2018 Festival of Social Science.

Professor Jennifer Rubin, ESRC Executive Chair, yesterday said: "The Festival of Social Science is one of the largest co-ordinated endeavours undertaken by a science community and demonstrates ESRC's commitment to public engagement. We know social scientists and economists value the opportunity to talk with the public to make an impact with their work. These events should inspire young people to pursue a career in social sciences and raise awareness about the impact made to wider society."

"Due to the cost of childcare, many women have no choice but to stay at home to care for their children rather than go back to work full time,” says Ozlem Onaran, a Professor of Economics at the University of Greenwich.

“In addition, the cost of care services for the elderly also mean that women are more likely to act as unpaid carers for their elderly relatives. This has contributed substantially to the gender disparity in pay that we see between men and women." 

As part of a wider study looking at the effects of gender and other inequalities on the economy, Ozlem Onaran and her team looked at the impact of wages, public and private sector investment and sales on the productivity of 24 sectors of the UK economy between 1970 to 2015. 

As well as finding a clear correlation between wages and productivity, the researchers also found that higher public investment in health, social care, education and childcare were linked to productivity across all sectors, including the manufacturing, food, automotive and electronics industries, as well as retail and hospitality among others.

"Our preliminary findings indicate that if the Government invested more in health and social care, as well as in education and childcare, which we refer to as 'social infrastructure', it would boost the productivity of our general workforce in two different ways,” says Onaran.

“Firstly, the availability of high quality care provision for children and the elderly would allow women to choose to go back to work full time if they wanted, which would release a huge amount of skilled women into the workforce.  Secondly, improving the quality of childcare and early years education would develop the cognitive and creative capacity of our children, increasing their future productivity.” 

According to Onaran, there's also evidence that women spend a higher proportion of their income on things that benefit the wellbeing of their children, such as health, education and healthy nutrition, so as women earn more, this positive effect on long-term productivity would be compounded.

“Our preliminary results show that a policy mix of higher wages, closing gender pay gaps and higher public spending would have a strong positive impact on growth, private investment, productivity and public finances in Britain,” says Onaran.

Notes for editors

  • ESRC research: The Effects of Income, Gender and Wealth Inequality, and Economic Policies on Macroeconomic Performance 

  • Festival of Social Science event: Women in economics
    Location: London SW1P. Date: 9 November 2018. Time: 12:00-17:40

    Women are underrepresented in the field of economics. Fewer women study economics at university than men, fewer female economists work at policymaking institutions, and there are fewer female economists in the public eye. As economics has a direct impact on the progress and wellbeing of society, this is a serious shortcoming.

    At this event we offer the chance to get involved with research that is bringing together gender studies and macroeconomics in order to advise policymakers on economic issues around gender. Our panel will discuss these important issues, explain what we are working on, and most of all provide an opportunity for you to voice your opinions and speak about your experiences.
  • The sixteenth annual Festival of Social Science takes place from 3-10 November 2018 with over 300 free events nationwide. Run by the Economic and Social Research Council, the festival provides an opportunity for the public to meet some of the country’s leading social scientists to discover, discuss and debate how research affects their lives. With a range of creative and engaging events going on across the UK, there’s something for everyone including businesses, charities, schools and government agencies. The full programme is available at: Catch up and join in on Twitter using #esrcfestival.


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