Childcare spending

Growth, whether it is for a country or for a person, takes place when things are done differently and better. Sri Lanka’s economy could be given a boost by assisting women to have access to better childcare, which would also encourage more equitable distribution of housework, result in better redistribution of resources and bridge skills gaps across the country.  

The Sri Lanka’s economy would grow faster with more female participation in the labour force if the Government subsidised or incentivised childcare programs as merit goods and more investors entered the industry, the International Finance Corporation (IFC), which is a part of the World Bank Group, said in a new study.

Childcare and early childhood programs are critical to economic development going forward, according to the study titled ‘Tackling Childcare: The Business case for Employer-supported Childcare in Sri Lanka.’ This is by no means a new development, research done by the International Monetary Fund (IMF) in 2015 showed Sri Lanka’s economy could grow by another 20% if more women entered the labour force, the IFC pointed out. 

At only 0.0001% of GDP, Sri Lanka lodges one of the world’s lowest rates of public spending on early childhood development. This puts the Sri Lankan Government’s annual spending in childcare at just $80,000. While the State does spend substantially on education it usually concentrates on supporting children after they begin primary education. Free pre-primary education can foster early cognitive development and help working parents generate increased incomes.

It is estimating returns on early childhood programs to be around 13.7% for the country, while individual adult incomes could increase up to 25%. It would also help Sri Lanka gain optimum returns from the tax-payer funded education system that educates a substantial number of women but has comparatively fewer numbers retained within the labour force. 

The 2018 Budget included many proposals to increase women participation in the labour force, including higher spending for childcare services in the public sector, flexible working hours and improving the transportation system in the country. However these have not been implemented widely and lack policy focus. Even though 52% of Sri Lanka’s population are women the issues that matter to women on safety, security and access are not always given priority, even during an election year.   

Government research shows that women in Sri Lanka leave employment to take care of children, and employers are also not keen to hire women to minimise turnover. Many private sector companies, also have been too slow to respond to issues that women face and address these challenges by providing services that enable them to have a better balance between their work and personal lives.  

The low female labour force participation in Sri Lanka has three key factors: Gender norms around household roles as women are responsible for household chores limiting access for outside employment; skills mismatch – a disparity between the skills women attain and what the market demands or will pay for; and gender bias – active and institutional gender discrimination, wage gaps, discriminatory work places and weaker job networks compared to male counterparts. This also means fewer women would have to seek employment as migrant workers and would earn more from their trained skills. It is important to find solutions, especially since Sri Lanka’s window for growth is also shrinking due to demographic transition.