Economic benefits of affordable, accessible childcare

AS SOUTH Africa concludes its G20 presidency, the inclusion of childcare in the Leaders’ Declaration affirms that investing in the care economy is no longer an outlying issue, but a global policy priority and an engine of economic growth.

- KATHERINE STEWART AND JUHI KASAN

While countries across the world struggle with sluggish growth and uneven labour participation that weaken productivity, investing in the care economy presents a clear opportunity to boost participation in the formal economy, strengthen skills and raise household incomes.

When families cannot afford childcare, caregivers — most often women - are forced into difficult trade-offs: leaving children in inadequate or unsafe care, taking on informal or unstable work, reducing their hours, or exiting the workforce altogether.

These choices undermine household financial security, delay career prospects, increase time poverty among women and widen existing inequalities. This is precisely why integrating childcare into the G20 agenda is so important. It shifts childcare from being seen as a private responsibility to being recognised as a cornerstone of labour force participation, human capital development, and inclusive, sustainable economic growth.

As the G20 transitions from South Africa's focus on solidarity to the US's workforce-led agenda, leaders have a pivotal moment to foreground affordable, quality childcare as a core economic strategy. Doing so positions both emerging and advanced economies to confront fiscal pressures and navigate profound demographic shifts.

Investing in quality, affordable childcare delivers immediate, measurable, and transformative economic returns. Economist Impact’s Childcare dividend initiative (CDI) modelled the projected benefits of providing access to quality childcare across 15 key global economies, including the economic engines of South Africa, Kenya, and Nigeria. The research illustrates a clear case for investment. The potential returns associated with investing in the care economy across the continent are powerful.