Unpaid care is a multi-trillion dollar barrier to economic and educational equity. It’s time to be intentional about it as an investment theme.
Unpaid care and domestic work (defined as child and elder care, care for the ill and infirm, as well as the variety of family domestic chores traditionally assigned to women) has been cited as the primary barrier to women entering the workforce worldwide. Globally, women and girls perform upwards of 75% of the total hours dedicated to these tasks. This amounts to nearly 12.5 billion hours per day, which has been valued at approximately $10.8 trillion. And these inequalities have been thrown into stark relief in the pandemic, where women have disproportionately shouldered the burden of COVID at home or on the frontlines as the majority of unpaid or poorly paid community health workers (UN Policy Brief, 2020).
Much has been written about unpaid care - and its gendered and economic impacts - but it’s not always clear what an investable opportunity looks like, particularly when regional nuances and needs are taken into account. This article explores the current landscape of care and unpaid work as an investment theme and defines prospective roles for funders and investors in both public and private markets.
Acknowledging Regional and Demographic Nuances
McKinsey’s calculation of Unpaid Care Work Gender Parity Scores (GPS) for 95 countries underscored that unpaid care work remains one of the most unequal domains in the world. There are disparities within developed markets. In the US, black women disproportionately work in caregiving jobs, and black mothers with young children have the highest labour force participation rates among all mothers.
Overall, low and middle income countries fare worse, with India, MENA, Southeast Asia, and LAC scoring particularly poorly in McKinsey’s report. Cooking, for example, can take as much as 30% longer in less developed countries. The gap is further compounded by limited state services, which creates additional household tasks including collecting water and firewood. Investable solutions like clean cookstoves address this burden by reducing cooking time, in addition to climate benefits.
Who is Focused on This Space, and What Are They Funding?
Currently, it’s mostly DFIs and foundations. Those we know of include CDC, OSF, IFC, DRK Foundation, Jasmine Social Investments, Bernard van Leer Foundation, Conrad H Hilton Foundation, Grand Challenges Canada, Echidna Giving, the Lego Foundation, ukaid, USAID, KCDF, and Ford Foundation.
“We don’t yet have a clear set of instructions on what investable looks like. Impactful solutions could be non-profit, requiring debt, or for-profit ventures looking for debt, equity, or blended capital”
Where funds are concerned, Shinsei Bank Japan Impact Investment II has one of the best examples we’ve seen of an intentional thesis, targeting “childcare, nursing care, and new work style-related businesses” that allow people to continue working regardless of their domestic circumstances. If you’ve seen other examples, please do share them with us.
Some investors we spoke to have said that, in spite of looking, they’ve just not been able to find enough investable opportunities. The ones we’ve seen are mostly focused on affordable or flexible childcare solutions, such as Klay Schools (India), Tiny Totos (Kenya) and Kidogo (East Africa). But there is also a highly investable elder care sector which has to date been underfunded - and will only increase with the rise of home-based or remote healthcare, fuelled by advances in technology and an aging population. Examples include Great Call (US) and Birdie (UK), which secured 7M euros in Series A to help elderly adults live independently.
Role of Funders and Investors
Philanthropy can help create an enabling environment for investment interventions by engaging men and boys to help shift perceptions and gender roles. On a recent call, one investor told us about a water tap project he’d been involved with in Malawi. It freed up travel time for women and girls, but they were just given other labour to replace it. Promundo’s State of the World’s Fathers report, while focused on childcare rather than domestic work, has some useful case studies around behaviour and norms change.
Both philanthropic and private investment capital can be deployed to fund innovations not yet at commercial viability, from seed to early growth. This is an investment theme in its early stages; we don’t yet have a clear set of instructions on what investable looks like. Impactful solutions could be non-profit requiring debt or for-profit ventures looking for debt, equity, or blended capital.
If you’re a public markets investor, you can get involved in shareholder engagement or at a public policy level, to hold public companies to account on their policies or advocate for elder care and disability care. You can also prioritise investing in companies and funds that have more equitable policies and practises around parental leave or flexible work (for example).
Building an Actionable Strategy
Access to affordable childcare is one early fundable opportunity, elder care is another. What might investable ventures look like beyond this? We’ve started compiling research around unpaid care and domestic work, and will be bringing together a carefully curated group of funders to share knowledge and explore collaboration opportunities. If you’re a funder or investor with an interest in this area, we want to hear from you.