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Failing to invest in care will render ageing Europe ill-prepared for looming workforce woes

Health & healthcare / COMMENTARY
Elizabeth Kuiper , Danielle Brady

Date: 21/09/2022
The recently launched European Care Strategy is a step towards improving the circumstances of caregivers and receivers. But considering the lessons learned from COVID-19, the cost-of-living crisis and the inevitable economic recession, it is not ambitious enough, lacking targets for long-term care and new initiatives promoting member state investment in care.

Undoubtedly, the European Commission’s publication of the European Care Strategy on 7 September should be welcomed and recognised as a step towards improving the circumstances of caregivers and receivers. COVID-19 brutally exposed the structural weakness of care sectors across Europe. So were the challenges in accessing quality, affordable care and care workers’ poor working and pay conditions. As was the predominant role of women in care roles, which contributes to gaps related to gender pay, pension and labour participation. The Strategy aims to address these issues. But it is yet unclear as to whether it will be successful.

A much-needed initiative

The presence of Commissioners Šuica, Schmit and Dalli at the press launch of the Care Strategy highlights its cross-cutting nature. Yet the fact that health and social care only figured marginally in last week’s State of the Union speech was a missed opportunity. It revealed how European policymakers often forget to consider these sectors’ broader picture and economic relevance. Usually considered soft sectors without clear EU competences, policymakers overlook the contribution of the (health)care sector to the European labour market and economy, as last week’s World Health Organization report shows.

Ensuring high-quality, affordable and accessible care to EU citizens is a key aim of the Strategy. Given the EU’s ageing population, ensuring the provision of care is vital. The number of EU citizens in need of long-term care will increase from 19.5 million in 2016 to 23.6 million in 2030 and 30.5 million in 2050. The proposed Strategy also seeks to improve the working conditions and work-life balance of carers and address gender inequalities attributed to care work. Despite the essential nature of care work, it is one of the most undervalued and underpaid professions and is often associated with precarious working conditions. This is even truer in rural areas in the EU, where the infrastructure for long-term care services and childhood education is often lacking.

Such conditions impact women and those with migrant backgrounds disproportionately. Women account for 79% of the 49 million care workers in the EU, many of whom come from a migrant background. This contributes to gender gaps in the labour market, such as in earnings, pensions and participation. Informal care work acts as a barrier to labour market participation, with 7.7 million women across the EU remaining outside of the labour market due to care responsibilities, compared to only 450,000 men.

Barcelona targets for early childhood education

There is no question that these issues must be addressed. But is the Strategy concrete and ambitious enough to deliver? Regarding childcare, the European Commission proposed a Council Recommendation on the revision of the Barcelona targets on early childhood education and care. The proposal seeks to revise the targets so that by 2030, at least 50% of children below the age of three are in early childhood education. Additionally, at least 96% of children between three and mandatory primary school age should participate in early childhood education and care, in line with the European Education Area target.

The proposal invites member states to provide enough hours of early childhood education and care to allow parents to engage with paid work meaningfully by improving access to early childhood education and care. The Strategy recommends using existing EU funding on measures which improve the quality, accessibility and affordability of inclusive early childhood education and care. The proposed revision of the targets goes further than the initial targets, with calls to introduce measures to increase the participation of children at risk of poverty or social exclusion. This is necessary to ensure all children’s adequate access to childcare, including those from homeless families, with a migrant background and from minority groups.

Revising the Barcelona targets and the associated recommendations should increase childcare provision across member states. Monitoring the implementation of recommendations under the European Semester should ensure that member states introduce measures to reach the targets. This would increase the provision of early childhood care, which is in the best interest of children, while also substantially increasing the number of women entering or re-joining the labour market. This would not only have positive ramifications for gender equality but also result in economic gain. According to the European Institute for Gender Equality, closing the labour market participation gap would lead to an increase in GDP per capita of between 3.2% to 5.5% in 2050. This would render a GDP increase of up to €280 billion by 2030 and €1,490 billion by 2050.

What about long-term care targets?

The European Commission’s proposal regarding childcare sets out clear national targets. But such concrete objectives are absent for long-term care, signalling a missed opportunity. While the recommendations in relation to the adequacy, availability and accessibility of long-term care services are welcome, targets like those for childcare (i.e. Barcelona targets) and monitored under the European Semester would be more effective and impactful. And such targets are required, especially considering what we know post-pandemic.

As Europe faces demographic change, clear targets are required to ensure its citizens receive the care they need. As it stands, 80% of long-term care in the EU is provided by informal carers. This cannot continue. And while the recommendations set out in the Council Recommendation on access to affordable high-quality long-term care may result in the increased provision of long-term care in member states, the lack of targets threatens further national differentiation. This would mean that not all citizens are afforded the same access to quality care.

Targets are also necessary to ensure the functioning of the labour market and, thus, the economy. If member states fail to improve access to care drastically, the impacts of an ageing population could mean that more individuals – most likely women – will have to exit the labour market or reduce working hours to perform unpaid care work. This would have negative implications for the labour market dependency ratio, thus hurting the economy.

Promote investment in care

Access to quality, affordable care is at the heart of the European Care Strategy. Public investment is required to achieve this objective, and yet the document offers few new initiatives in this direction. Currently, the EU average public expenditure on long-term care is 1.7%. But this varies from 3.9% in the Netherlands to 0.01% in Bulgaria. Like for the digital and green transitions, investment in the care sector should be strongly incorporated into the Recovery and Resilience Facility, with a special emphasis on lagging EU countries. These expenditures should be conditional on the provision of fair working conditions, including the guarantee of a decent living wage.

Failing to invest in care will render Europe ill-prepared for the years ahead. The essential role care plays in times of crisis was exhibited during COVID-19. As we face the cost-of-living crisis and inevitable economic recession, robust care sectors with increased public investment are needed. Those employed in the care sector are some of the lowest paid in society, meaning they will be some of the hardest hit in the coming recession. Additionally, if increased costs drive up the price of childcare, individuals may be forced to leave the labour market to perform care tasks, which, again, does not bode well for gender equality. In the spirit of strategic foresight, investing in care should be prioritised to mitigate the impact of demographic change, ensure access to affordable quality care and increase gender equality.

The Care Strategy is a step in the right direction. It recognises the necessity of action on childcare and long-term care. Nevertheless, despite some encouraging proposals, the Strategy does not go far enough. This does not mark the end of EU action on care but rather the first step, which requires investment in staff recruitment and retention to reduce European labour and skills shortages further. Failing to do so would have severe social and economic consequences for the EU and its member states.

Danielle Brady is a Junior Policy Analyst in the Social Europe and Well-Being programme at the European Policy Centre.

Elizabeth Kuiper is an Associate Director and Head of the Social Europe and Well-Being programme at the European Policy Centre.

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