The Macroeconomic Implications of Care Work

Senior woman having in-home consultation with nurse

“The care workforce—consisting of childcare workers, health-care and personal support workers, and residential advisors—was one of the hardest-hit sectors of the economy during the pandemic and has yet to fully recover: Compared with pre-pandemic employment levels, more than 230,000 care workers are still missing from the labor market.”

Introduction

Despite their crucial role in our economy and society, care workers have long been neglected, and their contributions undervalued (Kinder 2020). Even after the pandemic made this critical role clearer than ever, care workers have experienced one of the most incomplete economic recoveries post-pandemic. The care workforce—consisting of childcare workers, health-care and personal support workers, and residential advisors—was one of the hardest-hit sectors of the economy during the pandemic and has yet to fully recover: Compared with pre-pandemic employment levels, more than 230,000 care workers are still missing from the labor market. This brief argues that the continued growth and stability of the US economy will require government to rethink how it responds to America’s collective care needs.¹

Employment in care work is a vital component of the US economy and not just because the availability of care services enables individuals with care responsibilities to participate in the labor market.

Currently, there are more than 4.8 million workers who provide us with childcare and eldercare, and attend to our health and disabilities. Adding teachers to the care workforce sums to 12.2 million workers—representing about 7.6 percent of total employment.² Yet, the extent to which their work is undervalued and underpaid creates financial instability for care workers and risk for our entire economy.

References

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¹This analysis classifies care workers using the 2018 Census Occupation Titles. Aides and assistants include home health aides, personal care aides, nursing assistants, orderlies and psychiatric aides, occupational therapist assistants and aides, physical therapist assistants and aides, and personal care and service workers, all other. Childcare workers and residential advisors do not comprise additional occupational titles. Adjacent to our classification of care workers, teachers include preschool, kindergarten, elementary, and middle school teachers as well as special education teachers, teacher assistants, and other teachers and instructors.
²Author calculations using data from IPUMS-CPS, University of Minnesota, www.ipums.org.

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Key Takeaways

Takeaway #1

More than 200,000 workers have left childcare work (17 percent decline) and nearly 100,000 left work as care aides and assistants (2 percent decline).

Takeaway #2

Care aides and assistants have experienced below-average wage growth since the pandemic.

Takeaway #3

Childcare workers are the lowest-paid care workers despite experiencing above-average wage growth since the pandemic.

Takeaway #4

The lack of a full care work recovery negatively impacts the macroeconomy by lowering labor force participation and productivity and increasing inequality.