Decades of academic studies, corporate surveys, and plain old common-sense show that when women lack access to affordable childcare, it can be a barrier to keeping them on the job. A recent report 2 of US companies from care.com showed that childcare ranked among the highest of all employee-desired benefits alongside paid time off and health insurance coverage. That comes as no surprise as the cost of childcare continues to rise not just in the US but globally.
The majority of US parents spend 20% or more of household income on childcare, almost three times beyond what experts say are the affordable limits. In the UK, parents can spend up to two-thirds of take home pay on some form of external childcare.3 Globally, childcare providers are overstretched, waitlists are common and waiting times are lengthening as demand outstrips supply.4 Last year Japan’s government announced plans to offer JPY 3.5 trillion (more than USD 22 billion) in public funding for childcare services. 5
The motherhood penalty
Childcare can be a tricky issue for working parents, but women in particular bear the bulk of the burden. The Covid crisis dramatically underscored this reality. Over half of mothers with school age children said stress and worry affected their mental health during the pandemic.6 Flexible working conditions provided a lifeline for many working mothers, 38% of whom said they would have otherwise quit or reduced their hours to cope. 7
Figure 1 – Women spend more time caring for kids (US)
Source: US Bureau of Labor Statistics, American Time Use Time spent by women and men caring for young children in the US. Average hours per day spent on children under six in 2022.
Corporate relief
Companies that want to relieve the strain on working mothers as well as the drain of potential talent away from the workforce can step up internal programs to help. Those programs range from onsite care, subsidies to cover external care, or preferential access to a pool of childcare service providers.
Moreover, flexible working options that give employees more control over when and where they work can also help women achieve better work-life balance without denting their workplace productivity. For companies, there is no time to lose. In the US, pandemic-era childcare funding ran out in October 2023, which increases the value and allure of employers that offer childcare and/or flexible working benefits.
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A win for women, companies, and investors
The Robeco Gender Equality strategy affirms the value of women in the workforce. We use the power of investing to promote companies that are breaking down barriers for women and working mothers so they can be their best at work and at home.
The strategy systematically identifies and invests in companies which score high on a host of gender positive criteria including flexible working arrangements, childcare support, and employee wellbeing in addition to pay parity and diversity. This not only helps women and their families, but it is also a boon for shareholder value. Studies show that having the right ratios of women on boards, in management and within teams can significantly contribute to innovation, risk management and profitability.
That makes it an excellent addition to investors that want to combine positive returns with positive real-world change.
As we celebrate women and their contributions during the month of March, Robeco would like to pay a special tribute to working women, working mothers, and all those who are working to make the workforce a more equitable, inclusive, and productive environment.
Footnotes
1 “The recent decline in women’s labor force participation,” S. Black, D. Whitmore Schanzenbach and A. Breitwieser. Brookings Institution, The Hamilton Project, 2017. See also, “The 51%: Driving growth through women’s economic participation.”
2 Care.com. 2024 The Future of Benefits Report
3 Financial Times News briefing. “UK Childcare Crisis.” December 2022; Thousands Join March of the Mummies to Demand Childcare Reforms.“ Bloomberg Equality. October 2022.
4 “Reinventing the childcare industry for the workforce of today.” Boston Consulting Group, 2023.
5 “Japan eyes annual $22 billion for childcare to tackle birth rate decline” Reuters. May 2023; see also, “Funding the Policies to Boost Japan’s Birthrate.” The Tokyo Foundation for Policy Research. October 2023.
6 Kaiser Family Foundation (KFF). 2021. U. Ranji, B. Frederiksen, A. Salganicoff, M. Long. “Women, Work and Family during Covid-19: Findings from the KFF Women’s Health Survey.” March 2021.
7 McKinsey, Women in the Workplace 2023. October 2023.
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