An Economist’s View on the Care Economy

"In June, Secretary of Labor Marty Walsh hosted a virtual roundtable on the care economy featuring business leaders and Dr. Nancy Folbre, an economist at the University of Massachusetts. We asked Dr. Folbre to share more of her thoughts on the care economy – and what kind of investments will support America’s care infrastructure – as we continue to recover and build a more inclusive economy. 

Tell us about yourself and why you chose your current career path. 

I grew up in San Antonio, Texas, in a household where I was exposed to both extreme wealth and the realities of the working class. My father worked for oil millionaires as a business manager and accountant. An immigrant nanny who raised my father, known as Auntie or Tia, took care of me as a child, and I was very close to her and her successor, Maria. They were extraordinarily kind and wise caregivers. When I was about nine years old, Tia died and left me her life savings — a modest sum of money that later helped pay my college tuition. So, I had good reason to be interested in economics. I knew I wanted to go to graduate school, and to specialize in something that would at least seem somewhat practical, and was always drawn to themes like wealth, poverty and inequality. 

  How would you describe the care economy to someone who is unfamiliar with the term?  

I use the term care economy as the site of production, development and maintenance of human capabilities — a process very different from producing commodities that easily be bought and sold. A lot of the time and money that goes into the care economy moves outside the market — in families and communities that raise children, care for sick or disabled family members, and the frail elderly. Historically this form of “production” was excluded from “the economy” simply because it is based on meeting needs rather than the forces of supply and demand. Fortunately, this is beginning to change.  

The care economy, however, is not confined to families and communities; it encompasses many private and public enterprises that provide health, education and social services. There are big synergies between unpaid and paid work — parents collaborate with teachers in educating children, and doctors and nurses rely on patients and their family members to help produce “health.” Childcare workers and eldercare workers are also indispensable to effective care provision. 

Women are heavily concentrated in both unpaid and paid care provision, and this helps explain why they generally earn less than men. It is harder for them to “capture” the value they create.  

 What is caregiving work?  

One distinctive feature of caregiving work, emphasized above, is its highly customized and individually specific output. Another distinctive feature is the labor process itself, which often entails more personal connection than other types of work. These two features are clearly related — intrinsic motivation becomes especially important when it is difficult to reward people on the basis of measurable value-added. In caregiving work, concern for the wellbeing of the care recipient is quite likely to affect the quality of the services provided — the “invisible heart” of personal commitment is more important than the “invisible hand” of an impersonal market..."
Care Economy