How much does caregiving—from childcare to caring for elders—contribute to the U.S. economy? According to a new report from Melinda French Gates’ Pivotal Ventures, it’s $648 billion.
That gigantic number is bigger than the U.S. pharmaceutical industry ($510 billion) and “larger than the U.S. hotel, car manufacturing, and social networking industries combined,” says the report.
How is that possible? The care economy includes sectors ranging from infant and child care (traditional childcare, tech for new parents, early education programs, and more) to household management like laundry and cleaning to aging-in-place services and long-term-care insurance. This report, by Pivotal Ventures and the Pivotal-backed innovation lab the Holding Co., measures how much customers in these markets—including parents and families, employers, government payers, and insurance—are willing to pay for these services.
The report finds that this piece of the economy is growing rapidly, with the potential to boost its size beyond the $648 billion number. During the pandemic, lawmakers, experts, and advocates—including French Gates—have called for an overhaul of the U.S. childcare system. Companies are expanding the kinds of childcare benefits they offer. And the aging U.S. population is in need of more eldercare options.
The infant and child care sector, for example, is currently pegged at $136 billion—with the potential to rapidly grow to $167 billion with government investment. Non–home-based long-term care for the elderly and people with disabilities makes up the biggest chunk of the care economy, at $239 billion.
The report’s authors hope that identifying these opportunities will spur investor and entrepreneurial interest in meeting the demand for these services.
“It sits at the intersection of several macro-forces,” the report says of the care economy, “[like] the future of work, social determinants of health, our aging population, the sandwich generation, and at the intersection of some of the biggest trends: consumer tech, family tech, and home health care.”
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