Driving Change: Ipek Ilkkaracan on Why Investing in Care Pays Off

There are 16.5 billion hours of unpaid work performed every day around the globe. Even if we were to shift half of those hours to the paid sphere, they would amount to hundreds of millions of new jobs. So when a male colleague comes and says, "Where are the new jobs going to come from?" I just want to laugh, because to me, it's obvious. My name is Ipeq Iqarajan. I am a full-time professor of economics at Istanbul Technical University Faculty of Management. And I work in my research and teaching. I work on macroeconomics, labor economics, development economics, and feminist economics. The International Economic Association connects economists from well around the world, and helps shine the light on important empirical research, especially in developing countries that would otherwise likely go unnoticed. So it only seemed natural for the IMF podcast program to partner up with the IEA's Women in Leadership and Economics Initiative to produce a series of podcasts featuring a few of the economists behind the research that informs policymakers in places that are not often in the spotlight. We kick off the series from Turkey with Ipeq Iqarajan, who's made a strong business case for investing in more social care infrastructure. Which is not only good for social objectives, but it is also good for your governments, your economic plans, objectives of reducing unemployment, improving growth, and productivity. Other episodes in the series feature Kenyan economist Rose and Guggi on the power of local indices to tailor policy, and Colombian economics professor Marcella Islava, who examines Latin America's rather dysfunctional social security network. IMF podcast's very own Roda Metcalfe speaks with all three of these exceptional women that start with their conversation with Ipeq Iqarajan. You have become quite well known in certain circles for your work, engaging governments and looking at investing in care. Exactly. Different kinds of care, right? Child care, elder care. But with a particular focus on figuring out whether these governments will get a return on that investment. So why has this been your focus? Yeah, so investing in the care economy is an expensive proposal. As much as it makes sense from a gender equality perspective, when you go to your ministry for finance and your treasury and you ask for the money, one of the first things you will hear is the fiscal space and the competing needs on public budgets. So the project that I have been involved in aims to rationalize it through looking at the economic returns to investing in expansion of care services sectors. So why they should do it? In other words, why? Why they should do it. Based on the fact that care services have one of the highest employment multipliers. Every dollar spent on increasing the revenue of the care services sector has more jobs creation potential than any other sector. So for instance, for the Turkish context using Turkish data, we compared government spending, the potential of government spending for employment creation when that public funds is spent on early childhood care, for example, versus the construction sector. And we find that the number of jobs created through spending on preschool education has the potential to create three times more jobs than the same public funds being allocated to the construction sector. So I know that you've created a number of projects that really drilled down into this idea. Is there a name for these projects? I call them, in short, investing care studies which started back in the 2010s with two studies on South Africa and the USA by the Levy Economics Institute, which is based in New York. And then in 2014, 2015, through a collaboration between Istanbul Technical University, which is where I'm based, and the Levy Economics Institute, we undertook the third country study on investing in care, looking at the economic returns in terms of employment and earnings generation and poverty reduction. From then on, the studies caught on wildfire, a whole bunch of studies were conducted throughout the 2010s. And then finally, ILO and UN Women asked me to develop a methodological tool, which basically we call a guide to public investments in the care economy, which we released in 2021. So using that methodological tool, any country team can basically use it in order to do three things. Access, care coverage gaps in one of the sub-sectors. It could be early childhood care, long-term care for the elderly. Some of the countries where the tool has been applied such as Argentina, took up some very interesting niche areas of care, such as sports services for women at risk of domestic violence, care services for children with learning challenges and so on. Then the second part of the tool helps the team assess the costs of eliminating that coverage gap. So what is the magnitude of required public spending, like what percent of GDP, what have affordability, how affordable it is and so on. And then the third part of the tool goes on to laying out a methodology for estimating economic returns with a focus on, as I've already mentioned, on employment creation, earnings generation and the distributional outcomes. Where does the return line investment come from? Amy, where does this multiplier effect come from? Can you explain that? Well, it's a service industry that is labor intensive by the nature of the work that's being performed. So it resists automation, it resists mechanization, which is unlike the other sectors. So therefore its employment multiplier, despite some digitalization, continues to remain high. I guess what I was wondering is, you know, in the example of childcare, you produce a job for someone to take care of children. But then you also free up that mother to go get a job, right? So is that part of the return line investment we're talking about? Absolutely. There's also a very strong supply side aspect. So while you're creating jobs at the childcare center, which also favor women's employment, at the same time, you're alleviating the time constraints on the mother's labor supply and allowing her to engage in other activities. It could be paid work, it could be going back to school or self development, or it could be leisure. So this simulation tool that you've developed, if a company wants to try it out to find out how much of a return on investment they could get if they put X amount of money into a care program, how do they go about it? So the UN Women and ILO country offices lead the process. They collaborate with the ministries in the relevant ministries in whatever country, the tool is going to be applied. And the ministries usually pull together a research team and following that methodology laid out in the paper, they do the data compilation and the data analysis. In the first pilot implementation, which was done in five countries, I also served as a consultant guiding these research teams. Now we're doing the 2.0 version of the policy tool, more improved and more comprehensive, which is going to be applied in sub-Saharan Africa. So through this process, it really engages the policymakers at the country level to come together, apply this methodology and come up with a written output. We are also able to simulate the impact on poverty reduction, for example. So when we go back to the ministries of finance to make the argument for creating the fiscal space for investing in care, we go back to them with their self-stated policy objectives around unemployment, labor force participation rate and poverty reduction. That's quite something. So I'm interested to understand what brought you to this work. I mean, you identify yourself as a feminist economist and I know that your early work really focused on women's participation in the labor force and particularly why it's so low in a lot of countries, including your own, right? Exactly. So working in the Turkish context, one of the issues I picked up, research questions I picked up, was how to account for the persistently low female labor force participation in the Turkish economy. Turkey has been part of the OECD, it's part of the G20, it has a fair level of structural economic transformation and modernization, but its female labor force participation has remained the lowest in the OECD over a long time period. In fact, it is one of the lowest globally. And I understand that you discovered through your research that this is partly to do with education, lower levels of education, but even more than that, it had to do with what happens when Turkish women have children, right? Exactly. They were staying in paid jobs after they got married and marriage is almost synonymous with childbirth, right, within the first two years in the Turkish demographic context. So with marriage and childbirth, they were dropping out of the labor market, leaving their place to other single women. So basically most of the women who were working in paid jobs didn't have children. We didn't have children or they were university graduates, if they were mothers, which meant their earnings were high, so they were able to afford substitutes for their unpaid care work from the market, so they were able to send their child to a private childcare center and so on. Also, university graduates women are mostly informal employment, which means that they can benefit from maternity leave and care leave, which is not the case for informal employment, where most of the lower educated, lower skilled women concentrate. So something I find really interesting about your work is how it has evolved over time, you know, from this early focus that you had on classic feminist economic issues around gender inequality, to the research that you do now, which really links the feminist economics issues around the need for care, with much more mainstream economic goals of job creation and, you know, GDP growth. How did that should happen? Maybe the best way to explain it is through a personal story that has to do with my advocacy efforts in the Turkish context. So as a result of the research on work-life balance policies and women's unpaid work and labor force participation, we were able to convince at the time the Ministry for Women and the Ministry for Labor that what was needed was an intervention in improving access to childcare services. So the next step was to go to the Ministry for Finance to ask for higher allocation of funds. And what the finance and economy ministers responded was that this was a luxury for the Turkish economy that we had more immediate needs from an economic perspective, which they said was reducing unemployment and generating, you know, more jobs. So the whole plan was sort of put on to the shelf and it was around that time that I came upon the Levy Economics Institute Studies on South Africa and the USA, making the case that investing in care is also an effective strategy for employment creation and for earnings generation and poverty reduction. So it was at that time that I contacted them and I said I would like to do the same research for using Turkish data and that's how I moved on to making the linkages and expanding the framework for analysis and discussion beyond the objective of gender equality and making these connections to questions of public spending decisions. And with that research, we were able to go back and say you've been spending so much of the fiscal stimulus on construction, big mega scale construction projects. What we need is social infrastructure, social care infrastructure, which is not only good for social objectives, but it is also good for your governments, your economic plans, self-stated objectives of reducing unemployment, improving growth and productivity. And then as I said, it caught attention from also UN agencies and other intergovernmental agencies from the World Bank and the IMF and then the ILO asked us initially to do a 45 country study and that led to the policy tool with the ILO and UN Women later on, which then instigated the ILO policy simulator on investing in care. So I feel it's gotten a lot of traction, particularly on the international policy level. Have we seen an increase in the government investment? I don't think there is as much as it should have been, unfortunately, but nevertheless, there has been substantial improvement and a number of examples emerging in different countries. One example is the case of Colombia, Bogota, the city of Bogota, the previous mayor who happened to be a woman, worked to establish what they called the care blocks in all the neighborhoods of Bogota. So these care blocks are multiple service centers where women can get with their children, place the children at the childcare center, at the care block. Then there is an elderly community center or active living center. There's a laundry services center. There's a community kitchen addressing the needs for food and cooking and for washing the clothes. And on top of it, these care blocks also entail a number of options for women. Now that they place the children at the elderly and have reduced the time requirements on cooking and washing, the care blocks provide them with options or, for instance, going back into educational courses to finish high school or to go into language or computer courses skills development. Or even self-care to yoga classes. The example has become so successful that there's intense interest from around the world, including interest from my own city, Istanbul. The mayor, who just started his second term, has run on a campaign of establishing childcare centers in all the neighborhoods of Istanbul and which they're doing. It's a project in progress, but from what I hear, there are long lines of families waiting to get their children in. The demand is there, and that's why they're interested in the Bogota example of also extending this model to include these multi-service facilities. And as your research had some influence on those projects? For the Turkish context, I can say definitely yes, that our research and our research based advocacy had an impact. And in fact, when the mayor was running for his first term, one of his election campaign films said that investment in childcare centers in every neighborhood of Istanbul would make the children happy, would make the parents happy, particularly the mothers happy. But it would also create jobs that Istanbul needs. In the case of Bogota, there's been a lot of work going on in the Latin American context. Part of it is this investing in care and the economic returns, but a lot of feminist work is going around on the care economy. So it's culminated as this example of the care blocks in Bogota. Well, really interesting. So I mean, you live in Istanbul, as you've mentioned, sort of on the edge of Asia, very close to the Middle East. Has it been difficult in any way to work and do the research that you've done as a feminist economist? Has it been difficult to be a feminist economist working as you do in the part of the world that you live in? My geographic location has both a positive and a negative impact on the work that I do. On the one hand, given that this region, not only Turkey, but also the Middle East and North Africa region, the many region, and also South Mediterranean, have low labor force, female labor force participation rates. And this continues persist as an issue on the economic policy agenda. It allows for more space to have the feminist conversations in the general economics circles. There's more progress to be made. There's a bigger gap. Exactly. So that creates a demand. So that's the positive side. But at the same time, I think similar to what feminist economists face all over the world. I've also had experiences of, for instance, older male colleagues coming up to me and saying, you're a good economist. You should leave all this gender work as a sign and focus on the real economics issues. The important stuff. Yeah, and the f word, the feminist word feminist definitely, you know, has the potential to have a negative impact in some circles. And yet I can't help but think that the care economy, you know, could become increasingly important when you consider the dramatic changes we're seeing in the workforce. So many jobs becoming obsolete replaced by technology while care remains so labor intensive. What do you think? It gives one of the answers to where the new jobs are going to come from in this age of technological change or in the age of AI and digitalization and 3D printers. My response to it is that there are 16.5 billion hours of unpaid work performed every day around the globe within the domestic sphere doing care activities. Even if we were to shift half of it, half of those hours to the paid sphere and maybe reduce the number of hours by increasing the productivity through economies of scale or, you know, better efficient productive structures, even then they would amount to hundreds of millions of new jobs. So when a male colleague comes and says, where are the new jobs going to come from? I just want to laugh because to me it's obvious. That's an interesting point. So finally, you know, a great deal of the economic research in the world is done in certain academic hubs, especially the US and Europe. What do you think the importance is of having local economists researching issues in their own region as you have done? It's crucial. It's crucial if the research and the outcomes are to have any meaningful impact. The local person is the person who knows the context the best, who would be able to read the data, the irregularities in the data the best as opposed to an outside expert coming in working with that data. Also, the process of doing the research and coming up with the results builds the local capacity and awareness. And that really is the real impact, the main motor of transformation of social change. I think one of the important aspects of the progress and of the work on investing in care has been the development of the simulator and the methodological tool where country-based teams or policymakers can use themselves applied to their own country level data and can engage in a process of coming up with the results rather than having outside experts come and do it for them. So, it becomes a more sustainable process. In the other example of the outsiders coming and doing the work for you and then just handing you the results when the foreign experts leave, there is no capacity and very little awareness locally in terms of how to take that work further. Well, EPEC Yolakarajan, I really appreciate you coming on the podcast today. It's been fascinating to learn about this very important work that you do. Thank you. EPEC Yolakarajan was speaking with Roda Mecca as part of our special collaborative podcast series with the International Economic Association. Look for other episodes featuring Kenyan Economist, Rose and Guggi and Columbia's Marcella Islava. Go to IMF.org/podcasts or wherever you get your podcasts. You can also follow us on X or Handle is at IMF_podcast. I'm Bruce Edwards. And I'm Roda Mecca. Thanks for listening. [BLANK_AUDIO]