The Covid pandemic spotlighted the longstanding need for stronger care infrastructure in the United States. Without sufficient investment in safe and affordable care services and products, the economy cannot build back after the pandemic. Current federal and state efforts to invest in care are critical but private investment in care infrastructure will also be essential to not only build back – but build back better.

We do not have viable care infrastructure in the US today. Care infrastructure refers to the policies, products, and services that support childcare, eldercare, and other caregiving needs. The care infrastructure in the US is a patchwork of unpaid, informal, or poorly paid work supported by a combination of individual, employer, and government payments. It covers a range of different care needs (See Figure 1 below) from direct care provision, to care planning for children, to in-home care for older adults.

Simply put, our infrastructure today is not working for either payers or workers. Looking at just child care infrastructure: child care costs more than in-state public colleges in nearly 30 states and more than half of all American families live in so-called child care deserts where the supply of licensed child care slots is insufficient for the number of children in that area.¹

Care work has often been considered primarily a women’s issue. Women do the majority of both paid and unpaid care work today. The Institute for Women’s Policy Research estimated that as of 2018, women spent an average of 5.7 hours per day doing this work, compared to 3.6 hours for men, an estimated 37% more time on an average day.² These critical but unequally distributed care responsibilities are known to directly correlate with women’s physical health, mental health, and the ability to participate fully in the economy.³

In the paid care realm, over 90% of paid care workers such as childcare workers and home health aides are women, and disproportionately women of color and immigrants. These workers are often undervalued, with full-time workers making less than half the average US salary and with nearly a quarter of domestic workers living below the poverty line.^{4, 5}

Yet, the pandemic has highlighted that a stronger care infrastructure in the US is essential both to support women and to support our economy overall.

Over the past year, there has been increasing recognition that fixing care infrastructure in the US is essential for the economy to rebound. The pandemic further worsened the quality of care infrastructure, as thousands of care providers shuttered operations nationwide, with some states seeing up to 90% of formal caretakers temporarily losing their jobs.⁶ As childcare and other care services dried up, the resulting job losses and pressing demand for childcare left families struggling to stay active in the economy, with women of color and their families most affected.

By January 2021, 10 million women living with school age children – representing over a third of all American mothers living with school age children – were not actively working, a 1.4 million increase from January 2020. While this is down from the peak at the onset of the pandemic, as businesses reopen, data shows that many women exited the workforce altogether.⁷ 37% of small businesses in the hospitality and food sectors in the US – industries that disproportionately employ women – say their operating ability is impacted by the lack of worker availability.^{8, 9}

The Need for Private Investment in Care

The Biden-Harris administration – with support and accountability from activists and advocates – has already made or proposed critical investments in strengthening the Care Infrastructure. The Administration has proposed a variety of actions from ensuring families are able to pay for childcare on a sliding scale to investing in the caregiving workforce.

Within the American Rescue Plan, the American Jobs Plan¹⁰ and the American Families Plan¹¹ provisions have been made for $1.8 trillion in investments and tax credits for American families and children; with $225 billion going towards high-quality, affordable child care and the child care workforce; and $400 billion to expand access to quality, affordable home-or community-based care for aging relatives and people with disabilities. This is due in no small part to calls for action from feminist groups such as the #CareCan’tWait campaign and the Marshall Plan for Moms drawing attention to care responsibilities shouldered by women in America.

Yet more needs to be done, particularly by private investors. While we have seen significant momentum on the public financing side in recent months, private investment in care remains low. An extensive 2018 study of the ‘Landscape of Early Care and Education Financing’¹² by NCBI/NIH reveals that “private sector contributions to early childhood care services and programs, although difficult to quantify, are small relative to the contributions of families and the public sector.”

In Dalberg’s conversations with investors over the past year, we find that there is growing interest in investing in care infrastructure. For many, the challenge lies in not knowing where to start. Their conception of ‘investing in care infrastructure’ is investing in brick and mortar businesses such as individual childcare centers or retirement homes, which are highly regulated and have limited economies of scale. Yet, there are so many more opportunities for investing in care products and services.

The Opportunity for Private Investment in Care

At Dalberg, we believe that private investors can play a critical role in strengthening the care infrastructure, in partnership with and parallel to the federal and state governments. There are a few key steps that investors can take today to better understand and invest in the care market:

• Understand the true market: Investing in care does not just mean investing in childcare centers. There are a range of different sectors that provide care needs – from remote monitoring products to care search services to family estate planning services – that all fall under the auspices of care work. Businesses range from small brick and mortar locations to technology companies that ease care facilitation, which can scale and grow more efficiently. Figure 1 above provides a more holistic overview of the different investible sectors and segments in the care market that can be attractive to different types of investors from impact investors to traditional venture capitalists.
• Invest in the gaps: The demand for care services and products will rise exponentially over the next 5-10 years. For example, the demand for home health aides and personal care aides alone is expected to rise 34% between 2019 and 2029¹³, and elderly people will outnumber children by 2030 – a historic first according to US Census estimates.¹⁴ On the flip side, only 47% of carers have CPR certification, despite it being one of the most common requirements for care.¹⁵ And, among the 83% of caregivers who work with memory loss patients, only 65% have formal training in dealing with these types of patients.¹⁶ These figures suggest that many care workers lack pathways for career improvement, and that the market – currently fragmented across universities, community colleges, hospitals and non-profits – is ripe for potential disruption and private investment. These types of gaps in serving demand provide key opportunities for investors.
• Create and test innovative financial instruments. There are a number of specific niches within the current care infrastructure that are ripe for disruption and investment from private investors. Paid family leave is one strong example. Currently, the majority of employees in the US do not have access to paid family leave, a problem that becomes bigger the smaller the size of the employer.¹⁷ It is simply too expensive for many employers to administer and it is subsidized by the government only in a few US states. Insurance products exist that smooth outflows and reduce overall costs of employees taking paid leave, but the current products have not changed the status quo. Innovative investors could think through ways to change the structure and terms of these products which in turn could increase uptake, support employees, and crowd in other investors into this space and change the landscape of how employers pay for and support care infrastructure in the US today.

Turning investment in Care into reality

Our perspective has been developed over years of work on the issues surrounding time poverty, care worker rights, and care infrastructure in the US and beyond. We firmly believe that a multi-sector, multi-actor response is needed to solve the urgent infrastructure crisis impacting American families and caregivers, as well as the wider US economy. Private investors must work together closely with existing stakeholders working to support care infrastructure today. These actors – including policymakers and feminist advocates – can also play a critical role in increasing private investment in care. For instance, Federal, state, local, and Tribal governments can provide policy incentives for private investment in care, exploring, for example, tools such as pay-for-performance legislation. In addition, prominent and effective advocates for care, such as NDWA, Caring Across Generations, Promundo, and A Better Balance, can be valuable sources of counsel to private investors.

Private investors will be key players in this coalition of actors as the US lays foundations to build anew, reimagining and rebuilding the economy and its infrastructure post-pandemic.

¹ Factsheet: What does the research say about care infrastructure?
² Providing Unpaid Household and Care Work in the United States: Uncovering Inequality. Data refers to adults aged 15 or older.
³ Unpaid Care Work: The missing link in the analysis of gender gaps in labour outcomes
⁴ Data from the Census Bureau, ACS PUMS 1-Year Estimates, https://datausa.io/profile/soc/home-health-aides?compare=childcare-workers,
⁵ NDWA, ‘Coronavirus’ Economic Impact on Domestic Workers’.2020
⁶ Coronavirus Highlights the Problems With Childcare in America | Elections
⁷ Moms, Work and the Pandemic census.gov
⁸ America scrambles for restaurant workers Axios #2
⁹ Restaurants face new COVID-19 challenge: Finding enough workers
¹⁰ FACT SHEET: The American Jobs Plan
¹¹ Fact Sheet: The American Families Plan
¹² Landscape of Early Care and Education Financing – Transforming the Financing of Early Care and Education – NCBI Bookshelf
¹³ https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm
¹⁴ https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html
¹⁵ HomeCare, “Who Should Pay for Caregiver Training, Certifications and Screenings?”, 2018
¹⁶ HomeCare, “Who Should Pay for Caregiver Training, Certifications and Screenings?”, 2018
¹⁷ https://www.bls.gov/opub/ted/2019/access-to-paid-and-unpaid-family-leave-in-2018.htm