Abstract This paper makes the case for recognizing spending on care, whether for young children, disabled adults, or the frail elderly, as an investment in social infrastructure: ‘investment’ because some of its benefits are in the future as well as in the current period, and ‘infrastructure’ because it builds up an asset, the care system, with wider benefits to society than just those to the direct users of the services. Different metrics that could be used to measure costs and benefits are considered, as well as why national accounts do not take into account the benefits of investing in care. This matters because ignoring those investment benefits results in expenditure on care being less than it would be if they were taken into account, with adverse gender effects. It also matters because expenditure on care is not then considered when an economic stimulus is needed, despite having excellent multiplier effects, and because, fearing an adverse market reaction, policy-makers may not allow themselves to borrow to fund care spending. The paper concludes by considering whether it would be better to abandon the distinction between investment and consumption or instead adopt more inclusive definitions of both investment and infrastructure.
Susan Himmelweit (Wed,) studied this question.