6. Financing options to address women’s unpaid care work
This chapter provides a brief overview of financing options to alleviate women’s unpaid care work burden, focusing on investments in infrastructure, social protection and public services. It begins with reporting on comparative spending commitments to promote gender equality via four infrastructure sectors. It then describes options for financing social protection (highlighting the effectiveness of mixing contributory and non-contributory systems) and financing public service (with full public funding of care services viewed through the criteria of affordability and acceptability). Evidence is also presented on childcare provision, which covers the whole range of financing options. Mention is made of the importance of donors for health services in low-income countries, with newer sources of funds delivered through individual interventions (involving e.g. foundations and pro bono work by medical professionals). The chapter concludes by examining the funding dynamics of NGOs, which run the majority of programmes focused solely on promoting shared responsibility within the household.
Financing infrastructure options to address unpaid care work
Public funding for infrastructure in developing countries accounts for between 70% and 80% of total infrastructure spending, the balance often provided by public-private partnerships (Mohun, 2016[1]). In low-income developing countries the share of public spending is much smaller– around 10.5% since 2000, with a decline after a sharp increase in the early 2010s – and mainly concentrated in the energy sector (Gurara et al., 2017[2]).
Public financing of infrastructure is key, particularly where private market players do not have incentives to invest in poor, risky or remote environments. The experiences described in Chapter 4 in Infrastructure of market-based approaches also point to the need for more integrated approaches, as many households lack the ability to pay for improved stoves and fuel replacements. Furthermore, “the time burden on women and children may not be a sufficient disincentive for men who have a greater voice in major purchasing decisions” (UN Women, 2018[3]). Targeting subsidies to women so they can purchase these technologies is a possible solution but fails to address the norms around such technologies, which may discourage women from using new technology. Another approach has been providing banks with loan guarantees or similar risk reduction financing to promote loans to companies to expand access to clean cooking and other energy technologies (Dutta, Kooijam and Cecelski, 2017[4]). Parallel efforts may be needed to raise awareness about the health, well-being and time impacts of using traditional sources of energy in other to incentivise households to purchase these technologies. Combining the promotion of clean labour-saving technologies with microfinance, finance and savings initiatives is another approach used by the not-for-profit rural power company Grameen Shakti in Bangladesh (Dutta, Kooijam and Cecelski, 2017[4]).
Current evidence also suggests that investments in grid extension are less cost-beneficial than targeted subsidies to unconnected households in areas with grid coverage, particularly in very poor and sparsely populated areas (Buvinic, Furst-Nichols and Pryor, 2013[5]). However, reporting on the costs and benefits of electrification that incorporates analysis of the gender-differentiated benefits is still very sparse.
Despite the policy priority given by governments and donor agencies to investment in infrastructure linked to Sustainable Development Goal (SDG) 7 – “Ensure access to affordable, reliable, sustainable and modern energy for all” (UN Women, 2018[3]) – targeted gender-sensitive investments in infrastructure remain low (Box 6.1). The World Bank (2010[6]) in fact identified the limited resources available for social and gender analyses of infrastructure projects as one of the five main challenges to achieving reductions in gender inequalities (World Bank, 2010[6]).
The OECD tracks aid in support of gender equality and women’s empowerment using the Development Assistance Committee (DAC) gender equality policy-marker – a qualitative statistical tool that records relevant official development assistance (ODA) activities. The marker is used by DAC members as part of the annual reporting of their aid activities to the OECD. It is based on a three-point scoring system that scores aid as principal (with regard to targeting gender equality), significant (i.e. gender-mainstreamed), or not targeted. The data generated by the DAC gender equality policy-marker provide an estimate of aid in support of gender equality, but are not an exact quantification.
Analysis by the DAC Network on Gender Equality (GENDERNET) finds that aid to gender equality in the infrastructure sectors was low compared to other sectors on average in 2016-17 (Figure 6.1). The infrastructure covered in this study includes transport and storage, energy, communications and water and sanitation. Overall, donors committed over USD 6.7 billion to gender equality, representing 24% of total aid, in these four sectors on average per year.
Donors committed the most gender-focused aid in the transport and storage sector (USD 3.3 billion on average per year in 2016-17). However, one single large programme funded by Japan – a USD 2 billion-railway programme in the Philippines – accounts for half of this aid.
Aid to the energy sector is the least likely of the four to have a gender equality focus or be gender-mainstreamed. Only 13% on average per year incorporated gender equality over 2016-17 (USD 1.3 billion), but less than 1% targeted gender equality as a principal objective (USD 15 million).
Looking at volume of aid to the four infrastructure sectors, donors’ aid to gender equality is lowest in the communications sector, with only USD 69 million or 23% of total ODA in this sector. Of that share, 1% targets gender quality as a principal objective (USD 4 million).
Source: OECD (n.d.[7]), Creditor Reporting System, “Aid projects targeting gender equality and women’s empowerment” https://stats.oecd.org/Index.aspx?DataSetCode=crs1.
Viability gap funding (VGF) has been used to catalyse private sector investment for development projects (PIGD, 2018[8]). This involves covering a part of the upfront capital costs with a grant, often for pro-poor private infrastructure investments. According to CEPA (2016), however, while VGF can effectively close the initial funding gap, it needs to be carefully designed to deliver the same beneficiary-level impacts as other products, “as it is focused on improving the ability of projects to attract commercial capital” (CEPA, 2016[9]).
Financing social protection options to address unpaid care work
Generally, social protection financing requires a combination of taxes and contributions by individuals and employers to close coverage gaps. Public financing has a greater potential for ensuring adequate protection for all, in a way that reflects the principles of risk sharing, equity and solidarity, and that is fiscally, economically and socially sustainable (ILO, 2017[10]). While the feasibility of different social protection systems is constrained by a government’s resource base, there is a variety of options to generate resources for social protection. For example, countries such as Ghana and Indonesia have reduced or eliminated fuel subsidies and used the proceeds to extend social protection.
Various funding mechanisms can be and have been used to cover employees’ wages and benefits when they take leave: when considered a social security benefit, for example, employers may be reimbursed by the state. When social security alone does not provide for leave, collective financing — shared among individuals as well as among employers — can equally distribute the cost and create broader, more stable support for leave that is more inclusive of all types and levels of workers (Shand, 2018[11]).
Box 6.2 offers examples of how a mix of contributory and non-contributory systems have been used to progress towards universal coverage of key parental leave and maternity benefits. Non-contributory systems and provisions that recognise women’s caring role are essential to ensure that social protection systems do not reinforce gender inequalities.
In Australia, the National Paid Parental Leave plan, introduced in 2011, established an entitlement to 18 weeks of government-funded parental leave pay at the rate of the national minimum wage for eligible working parents (mothers and fathers). The plan is subject to a relatively generous means test. Together with the “baby bonus” that is also paid to non-working parents and is subject to a stricter means test, the parental leave plan reaches close to universal coverage.
In Mongolia, formal employees are covered by social insurance on a mandatory basis and receive a replacement rate of 100% of their covered wage for four months. Herders, the self-employed and workers in the informal economy can join the plan on a voluntary basis, and receive maternity cash benefits for four months at a replacement rate of 70% of their selected reference wage after 12 months of contributions. In addition, maternity cash benefits under the Social Welfare Scheme are provided to all pregnant women and mothers of infants regardless of their contribution to the social insurance programme, status in employment, or nationality. The benefit, equivalent to approximately USD 20 per month (2015) is paid from the fifth month of pregnancy for twelve months. Maternity care is provided through the universal, tax-funded health-care system. A new law, passed in June 2017 to enter into effect on 1 January 2018, extended the benefits to up to three years after the birth for women who have suspended their work for childcare reasons.
Source: (Global Partnership for Universal Social Protection, 2016[12]) The Universal Child Money Programme in Mongolia; (ILO, 2017[10]), World Social Protection Report 2017–19: Universal social protection to achieve the Sustainable Development Goals.
Pressures on public finances have led to calls for curtailments to social protection systems, stronger targeting to groups perceived as being the most vulnerable, and privatisation of or cuts in care provision in some countries. These pressures have implications for the resourcing of gender-sensitive or transformative care policies within social protection programmes and policies. Meanwhile, an emerging body of evidence suggests that there are long-term economic benefits from investing in the caring industries and social infrastructure. Resolving care deficits increases women’s labour market participation and earnings, which in turn generate additional “fiscal space” for expanding social protection (Ilkkaracan, Kaya and Kim, 2015[13]); (Ortiz, Cummins and Karunanethy, 2017[14]).
Donors can play an important role in financing social protection (Figure 6.1), particularly by providing support for pilot programmes or innovative initiatives such as the cash transfer programme in Kenya described in Chapter 5. However, aid to the social infrastructure and social services sector (which includes social protection programmes) remains low. On average in 2016-17, DAC members committed around USD 3.3 billion to social infrastructure and other services overall, of which USD 1.3 billion (or 59%) had gender equality integrated as a principal or significant objective. While this represents a significant portion of total aid to these sectors, the overall amount of aid focusing on gender equality remains low compared to other sectors such as health services, population policies/programmes and reproductive health. In addition, only around 3% of bilateral aid to social infrastructure and other services targeted gender equality as a principal objective.
Note: The darker colour represents the share of ODA targeting gender equality as a principal objective. The lighter colour represents the share of ODA targeting gender equality as a secondary objective. The sectors represented in purple encompass public services. The sectors represented in blue encompass infrastructure. The sector represented in grey corresponds to other social infrastructure, which includes social protection programmes. Education here refers to unspecified level and primary education. Secondary and post-secondary education were not counted.
Source: OECD (n.d.[7]), Creditor Reporting System, “Aid projects targeting gender equality and women’s empowerment”, https://stats.oecd.org/Index.aspx?DataSetCode=crs1.
Financing public service options to address unpaid care work
Different financing mechanisms have been tried with respect to public (non-household) provision of care of all types, ranging from full public funding of universal coverage services to complete “out of pocket” payment by households that purchase care services through the market. In the first case, government makes provision on behalf of society as a whole, in accordance with the view that support for public goods is a principal function of government. Where caregiving is left entirely or largely to non-state actors, governments’ abrogation of their role not only discriminates against persons in need of care, but could also be considered gender-discriminatory, given gender inequalities in unpaid care work.
Full public funding of care services is non-discriminatory and provides the fullest coverage to the population, including the most disadvantaged and vulnerable groups. It is therefore the type of financing that best meets affordability criteria for all households. The affordability of means-tested public programmes and insurance plans depends on eligibility criteria and other aspects of programme design and delivery, such as the amount of additional “out of pocket” payments involved. In all cases, acceptability by beneficiaries is affected by the quality of service provided. For example, public services may be so poor that they are demeaning not only for the person concerned but also for family caregivers. On the other hand, depending on the cost and quality of commercial services provisions, “value for money” considerations enter into consumer decisions.
Approaches to financing that incorporate elements of public subsidy include means testing of public service provision or partial subsidy of providers’ costs from public funds, through direct cost-sharing payments or fiscal incentives or exemptions. Social funds are another option; these are paid either directly to the state (as in donor programme support) or to organisational providers (e.g. through fundraising by NGOs or charities from local or international sources, or from bilateral or multinational donors). Insurance plans, public or private, spread funding within a pool of potential users. Finally, financial contributions by employers may also attract subsidy, whether from general state revenues, from taxes on all employers or employees, or some mixture.
There is insufficient evidence to attempt generalisations on the current status of financing of care services in middle- and low-income countries. However, some scattered evidence is available, mainly on childcare provision, which covers the whole range of financing options. The public funding of childcare services is relatively widespread and growing internationally compared to funding for other types of caregiving. In Mexico for example, the federal government subsidises up to 90% of the cost of day care for children eligible through the Estancias Infantiles programme (O’Neill, Chopra and Vargas, 2017[15]). In some countries, governments have committed to financing and providing preschool programmes at the central, regional, municipal or local government level, and formally employ childcare staff. Examples are Ghana (IFS, 2018[16]), Costa Rica, Brazil (World Bank, 2018[17]) and Kenya. While they aim for universal coverage, they rarely achieve it.
Personal income taxation codes can provide another form of public subsidy of the private costs of childcare. Tax deductions for childcare fees reduce the burden of costs for parents in 33 countries worldwide, for example Bhutan and El Salvador (World Bank, 2018b[18]). The enrolment of children in pre-primary education is higher in economies that provide deductions for childcare fees than in economies without such deductions (World Bank, 2018b[18]).
The relatively high level of commitment of some governments to public funding of childcare provision responds to long-standing research evidence and advocacy of preschool support for its social value. Quality childcare from the earliest age is a long-term investment in human capital and in the reduction of social disparities (Francesconi and Heckman, 2016[19]). Preschool child support programmes need to provide services in non-household centres, finance parental support programmes, or both.
If public investment in childcare provision is indeed a public good, the upfront financial cost will be offset by medium- and longer-term benefits with revenue-raising potential. Simulations for South Africa and Uruguay show that between one-third and one-half of the gross investment in early childhood interventions could be recuperated through the tax and social security system in the short term (UN Women, 2018[3]); another estimation places the return at up to 77% (UN Women, 2016[20]). It has been assessed that increased resources for care in seven OECD countries would lead to approximately twice as many jobs as investing the same amount in construction. Investing 2% of a country’s gross domestic product in the care industry would increase women’s employment rates by between 3% and 8% (O’Neill, Chopra and Vargas, 2017[15]). Advocates claim that preschool provision is one of the soundest of all possible public investments (Devercelli and Neuman, 2013[21]).
Donors can also support provision of public services with the intention of promoting gender equality and women’s empowerment in developing countries (Figure 6.1). On average per year in 2016-17, donors integrated gender equality as either a principal or significant objective in USD 3.2 billion of aid to the health sector, USD 3.6 billion to population and reproductive health, and USD 2.8 billion to primary and basic education. In terms of proportions, donors’ efforts to support gender equality are most evident in the education sector, where over 59% of total bilateral aid integrated gender equality on average in 2016-17. A slightly smaller portion of aid integrates gender equality in the health and population and reproductive health sectors (47% and 44% of aid, respectively on average in 2016-17).
Research showed that the donor community is not sufficiently focused on care for older persons (Key informant interviews, Kenya APHRC). HelpAge International is using its international funding to advocate new approaches to elderly care at the highest level. It has helped member countries of the African Union adopt protocols on this care (Key informant interview) in line with evolving World Health Organization guidelines; the WHO guidelines have themselves been influenced by academic work at APHRC (Key informant interview, Kenya APHRC). Meanwhile, Age Nepal’s training programme is raising standards of geriatric care, in an approach reminiscent of social childcare enterprises in Kenya (Key informant interview, Nepal).
Health services in low-income countries depend in large measure on donor funding for individual, siloed programme interventions (Key informant interview, IDRC). The Mother and More project (like social enterprises dealing with childcare in Kenya) taps into some newer sources of funds: it raised money for office infrastructure from a foundation, and relies on pro bono work by medical professionals to provide health services as an extension of their paid working time. Individual donor-funded health programmes and projects each take their own path. Unless unpaid care work is a policy priority of the donors or a governing principle at national or international level – or project monitoring reveals its relevance to project performance – projects and programmes do not tend to take account of the constraints on caregivers.
Employers are another source of funding of childcare, in cases where companies are required to provide it by law or have chosen to provide it for their employees. Financing can be complete or partial. However, this accounts for a small portion of childcare service provision. In the 19 countries where the regulatory framework requires employers to support childcare, 60% provide government benefits to parents while 54% provide such benefits to childcare centres, and 34% to employers (World Bank, 2018[17]). Some larger employers in these countries, however, are seeing beyond the upfront costs of supplying childcare and are recognising the long-term benefits for the company, including reduced turnover and enhanced worker engagement and retention (IFC, 2017[22]).
NGOs often provide services below market rates on a cost-sharing basis, levying small fees in order to extend their reach beyond the level that their own fund-raising efforts, and donor contributions, could support. They may, if user fees are on a sliding scale, be operating a means-tested service in order serve disadvantaged groups, possibly with some cross-subsidy among the client base. Communities and co-operatives fund services from their membership fees and contributions in cash, or mobilise in-kind payment through voluntary labour (ILO, 2016[23]). Community and co-operative projects usually operate some cost-sharing, charging fees even if at a minimal rate (ILO, 2016[24]). As with any communal “self-help” activity, the quality and extent of the services that can be provided depends on the resource level of the community.
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