The Effects of Public Spending in the Care and Green Economies: The Case of South Korea

Abstract

This article analyzes the impact of public spending in the care economy and the green economy on the employment of men and women and on gross domestic product (GDP) in South Korea using a vector autoregression model. The care economy includes healthcare, social care, education, and childcare. In analyzing the green economy, we focus on renewable energy, energy efficiency, and public transport. The results show the employment-creation potential of the green and care economies in facilitating a transition to a zero-carbon caring economy. The article analyzes the gendered employment effects and highlights the importance of a policy mix that ensures that any green transition is gender-equitable and adequately addresses countries’ ecological transition and care needs. The multiplier effects on GDP are positive and above one in both spending categories and larger in the care economy in the medium run.HIGHLIGHTSSouth Korea shows strong GDP multipliers from spending in care and green sectors.Public investment generates large-scale employment for men and women.Care sector expansion disproportionately increases women’s employment.Green and care investment together help narrow gender employment gaps.Fiscal expansion requires taxation, borrowing, and institutional support.