The UK’s productivity - a measure of how efficient its workforce is - lags behind other European countries, and is still well below 2008 recession levels. At the same time recent gender pay gap reporting shows that men earn on average almost 20% more than women. 

A new study suggests that these two problems are linked, and that gender equality is key to solving the UK’s productivity crisis. The findings show a clear link between investment in childcare and social care and productivity over both the short and long term, a trend attributed in part to in part to freeing up the female workforce. 

The study will be presented at an event as part of the ESRC's 2018 Festival of Social Science.

Professor Jennifer Rubin, ESRC Executive Chair, said: "The Festival of Social Science is one of the largest co-ordinated endeavours undertaken by a science community and demonstrates ESRC's commitment to public engagement. We know social scientists and economists value the opportunity to talk with the public to make an impact with their work. These events should inspire young people to pursue a career in social sciences and raise awareness about the impact made to wider society."

"Due to the cost of childcare, many women have no choice but to stay at home to care for their children rather than go back to work full time,” says Ozlem Onaran, a Professor of Economics at the University of Greenwich.

“In addition, the cost of care services for the elderly also mean that women are more likely to act as unpaid carers for their elderly relatives. This has contributed substantially to the gender disparity in pay that we see between men and women." 

As part of a wider study looking at the effects of gender and other inequalities on the economy, Ozlem Onaran and her team looked at the impact of wages, public and private sector investment and sales on the productivity of 24 sectors of the UK economy between 1970 to 2015. 

As well as finding a clear correlation between wages and productivity, the researchers also found that higher public investment in health, social care, education and childcare were linked to productivity across all sectors, including the manufacturing, food, automotive and electronics industries, as well as retail and hospitality among others.

"Our preliminary findings indicate that if the Government invested more in health and social care, as well as in education and childcare, which we refer to as 'social infrastructure', it would boost the productivity of our general workforce in two different ways,” says Onaran.

“Firstly, the availability of high quality care provision for children and the elderly would allow women to choose to go back to work full time if they wanted, which would release a huge amount of skilled women into the workforce.  Secondly, improving the quality of childcare and early years education would develop the cognitive and creative capacity of our children, increasing their future productivity.” 

According to Onaran, there's also evidence that women spend a higher proportion of their income on things that benefit the wellbeing of their children, such as health, education and healthy nutrition, so as women earn more, this positive effect on long-term productivity would be compounded.

“Our preliminary results show that a policy mix of higher wages, closing gender pay gaps and higher public spending would have a strong positive impact on growth, private investment, productivity and public finances in Britain,” says Onaran.