Care Economy in Korea: Beyond COVID-19 and Towards a Sustainable Caring Society

Care for others is first and foremost a moral commitment, but I believe it’s also very important to show that it is an economic necessity. Care is costly in the short run but generally pays off in the long run. What I want to emphasize is that our economic institutions are not sufficiently attentive to their long-run benefits.

In particular, we can no longer rely on measures of gross domestic product (GDP) as a measure of our collective output or as an indicator of our economic success. In other words, we need some fundamental changes to our economic accounting system. A big problem is that GDP doesn’t include the value of unpriced assets, such as ecological services like a stable climate or unpaid work. Nor does it subtract the money spent on social bads—money spent on pollution, resource depletion, crime, drugs, suicide, depression. It’s really not an indicator of what we all care about the most. I am particularly interested in the implications of demographic change for the way we think about economic accounting systems. I know that South Korea is a global example of a transition to below-replacement fertility rate. But now, almost half of the global population lives in countries with below-replacement fertility, and this is something that economists have only recently acknowledged as a source of economic strain, along with other global challenges like the COVID-19 pandemic and climate change. One of the interesting things about these trends is that they are forcing us to re-evaluate the way we think about and measure our economic progress.

In redirecting your attention to the care economy, I want to be very clear about what I mean by that. I define the care economy as the set of activities and investments that produce, develop, and maintain human capabilities. It’s similar to the concept of human capital, but it’s broader because it looks beyond market returns to think about benefits for society as a whole. The care sector includes both paid work—childcare workers, elder care workers, healthcare, education, social services—but it also includes the unpaid work provided by family and community members. Many countries, including Korea, measure this work through systematic time-use surveys that allow us to know exactly how much is performed.

Care provision, whether paid or unpaid, has some distinctive features. It’s important to understand these features in order to grasp the dynamics of care provision, especially within a capitalist market economy. Care provision is motivated by obligation, responsibility, affection, altruism, and economic self-interest. Care providers themselves need support and recognition. Care provision is less about voluntary exchange in markets and more about transfers—transfers of time and money to dependents, such as children, the elderly, the sick, or those suffering from disability.

A key economic feature of care provision is that it’s difficult to capture the value added in providing a service. You’re not producing a commodity that can easily be bought, sold, or measured, or that’s subject to supply and demand forces. Another important feature is that care provision has positive spillovers, or externalities. People benefit beyond the immediate recipients. For example, we all benefit from raising healthy, happy, productive children and caring for the elderly in an effective and kind way.

Because of these economic characteristics, care provision is not always efficiently produced by capitalist enterprises. We are facing problems with both the quantity and quality of services provided. For most of the 20th century, we saw rapid population growth due to high fertility and mortality decline. But in the 21st century, we’ve seen rapid fertility decline, as mentioned, to below-replacement rates in many countries, including Korea. This transition to lower fertility rates has been neglected and misunderstood by conventional economic theories. To understand it, we need to look at both patriarchal and capitalist institutions and how they’ve been mediated by global trends and national cultures.

Looking back, high mortality once made high fertility rates necessary for economic and military success, and many civilizations adopted patriarchal institutions that forced women to specialize in care provision. Technological change has destabilized many of those patriarchal institutions, creating new forms of distributional conflict. For example, we’re now seeing conflicts over who will pay for raising well-educated, productive children, for security in old age, and for health care. This is very evident in the evolution of the welfare state, which redistributes money between generations, especially between the young and the old.

In fact, in almost all affluent countries, the benefits of raising children have been socialized through taxes on the working-age population to support the health and retirement of the elderly. This process has significant economic consequences. Now, we’re seeing states—especially in Korea—begin to socialize more of the costs of children, providing greater public subsidies, but they’ve underestimated the actual costs and women’s willingness to voluntarily continue to pay them. These factors have contributed to significant fertility decline.

Specialization in care provision is always going to be disadvantageous because it’s difficult to capture the economic benefits. But the services provided by human capabilities are crucial to economic success. This leads to a moral principle: responsibilities for care provision must be equitably shared, both between family work and paid work, and between men and women. As for policy implications, we don’t need to worry excessively about below-replacement fertility rates. It won’t have terrible consequences and will even have some environmental advantages. However, we must adapt by investing more in the capabilities of our children, increasing the productivity of the younger generation to make up for the decline in numbers. Eventually, as global populations decline, we will have to learn how to stabilize them, a problem similar to stabilizing global climate. It’s likely going to require cooperation and new social institutions developed in a collaborative and democratic way.

This will also require a fundamental reorientation of priorities away from economic growth defined by GDP. We need to recognize the intrinsic and extrinsic value of developing and maintaining human capabilities in an ecologically sustainable economic growth process. COVID-19 has taught us a lot, but the key lesson I would emphasize is that economic growth itself does not deliver health and well-being. Spending on children and parents is not a waste; they are the most important investments we can make. Spending on a large elderly population is not a burden or a source of unproductive spending; it, too, is an investment—an investment in our hopes for longevity and in reducing the depreciation of human capital.

To end, I want to mention some useful resources for those interested in the global movement to bring care to the forefront of the economic agenda. The United Nations has sponsored a global alliance for care, with many resources and activism emerging around it. There’s also a new project called the Well-being Economy Alliance, with Scotland leading efforts to develop an economic plan that prioritizes well-being over traditional economic growth. I’m hopeful that other countries will join the Well-being Economy Alliance. Oxfam has developed a care policy scorecard, a tool for assessing country progress toward creating an enabling policy environment for care. I hope there will be interest in filling out the scorecard in detail for Korea.

Nancy Folbre

Nancy Folbre is a feminist economist and professor at the University of Massachusetts Amherst. She is globally acclaimed for her work on the economics of care and has authored many books, including The Invisible Heart. She has also served as president of the International Association for Feminist Economics and is an editor of Feminist Economics. In 2022, Professor Folbre spoke about her research at Yonsei University’s Global Engagement & Empowerment Forum on the topic “Care Economy in Korea: Beyond COVID-19 and Towards a Sustainable Caring Society.” The following is a simplified transcript of her presentation. More of her writing can be found on her blog: https://websites.umass.edu/folbre/.