Investing in Early Childhood Education and Care Services in Jordan

Jordan’s very low employment rate (30.9 percent) coupled with a high unemployment rate (20 percent as of 2021) indicates that job creation remains a crucial challenge for the Jordanian economy.[1] The situation is exacerbated by the influx of refugees since the 2010s as well as the prevailing economic crisis under the COVID-19 pandemic. Jordan’s National Employment Strategy (NES) 2011–20 had identified job creation of adequate quantity and quality as a top priority. The National Economic Priorities Program (NEPP) 2021–23 maintains the emphasis on job creation. The Jordanian Five-Year Reform Matrix (FYRM) 2019–24 names “growth along with jobs” as the main objective. In 2023, the Economic Modernization Vision (EMV 2023) made a commitment to creating one million new jobs by 2033.[2]

Each of the above policy documents emphasizes the need for job creation particularly for women (and youth) given the large gender disparities in employment with a female employment rate at only 10.2 percent, versus a male employment rate of 49.3 percent as of 2021. Hence, the policy documents also underline the importance of gender-aware labor market measures for equal opportunities in access to jobs. The NES 2011–20 pointed to limited access to early childhood education and care (ECEC) services as a major factor facilitating constraints on female labor supply. In a similar vein, the FYRM 2019–24 lists “improving women’s economic opportunities through childcare” as one of the reform pillars. The framework for action, though—as foreseen by these policy documents—on improving access to ECEC services is limited to improving the regulatory framework for licensing of childcare centers, cost effective programs rather than center-based services, or childcare centers by workplaces and non-governmental organizations rather than through public investments (MoP 2019; EMV 2023).

This study aims to explore the potential of public investments in the expansion of ECEC services as an effective policy strategy for simultaneously meeting both policy objectives: job creation and women’s economic empowerment in Jordan. While the NEPP 2021–23 has identified agriculture, tourism, and information technology as the priority sectors to lead economic growth and job creation, this study aims to highlight the importance of the social care services sector (including ECEC services) as another target for jobs generation, given the labor intensity of care services provisioning, and hence its high employment multiplier effects.

The data analysis was undertaken in four stages:

1. an assessment of the deficit in ECEC services toward the policy objective of universal coverage of children under age six;
2. an estimation of the costs of eliminating this deficit, i.e., the required magnitude of public expenditures;
3. an estimation of the magnitude of new direct and indirect job creation in response to increased public expenditures on ECEC services sector: i.e., the number of new jobs to be created directly in the ECEC sector and indirectly in the other related sectors through backward linkages and induced effects;
4. a simulation of distributional outcomes of job and income creation in terms of the characteristics of the potential job recipients and the magnitude of their labor earnings.

The returns to increased public expenditures on a hypothetical expansion of ECEC services in terms of employment and income generation were evaluated in a comparative framework, with reference to the returns if a similar magnitude of public expenditures were to be allocated to physical infrastructure and the construction sector instead.

The findings show that achieving a long-run policy objective of universal access to quality ECEC services by all children aged 3 to 5 and at least 50 percent of children aged 0 to 2 (including non-Jordanians), requires the enrollment of close to 793,000 additional children in childcare centers and preschools.  If such an expansion takes place on the condition of high-quality services and decent jobs in the ECEC sector, the cost is estimated at 1.39 billion JD (2020 prices), equal to 4.36 percent of GDP. While this is a substantial amount, an expansion plan can be implemented over the medium run prioritizing the disadvantaged households and regions. In addition, the substantial jobs and income creation will enhance its feasibility through increased tax revenues in the short-run, and increased labor force participation and productivity over the longer run.

The simulation findings show that increased expenditures of this magnitude for improving children’s access to ECEC services, has the potential to create a total of 218,000 new jobs (21.2 percent in sectors other than ECEC); almost 60 percent of the new jobs would employ women. If the same amount of public expenditures is allocated to the construction sector instead, employment creation is limited to 60,500 new jobs; only 5 percent of the jobs would employ women. Under the ECEC expansion scenario, women’s share in total employment improves to 20.2 percent as compared to a baseline of 14.8 percent. Under the construction boom scenario, women’s share deteriorates further to 14.4 percent. While in relative terms, job creation through ECEC spending favors women as job recipients, in terms of absolute numbers it has the potential to create more employment opportunities for men (89,000 male jobs under a hypothetical ECEC services expansion) than spending of similar magnitude on construction (57,600 male jobs under a hypothetical construction boom). Hence a sectoral allocation of public spending towards ECEC services does not only have the potential to create almost four times more jobs than allocation of spending to the construction sector, but also does so in a gender-balanced manner, narrowing the gender gaps in employment.

Exploring jobs distribution in more detail, we find that job creation through ECEC spending tends to favor married women (improving their share in total employment from 8 to 13 percent) and women living in households with small children (improving their share in total employment from 10 to 14 percent). More than 100,000 women previously excluded from the labor market due to engagement in homemaking enter employment, in addition to 27,000 unemployed women and 26,000 unemployed men.

The estimation of labor earnings of new job recipients shows that jobs created under the ECEC expansion scenario improve the mean monthly earnings of women with post-secondary education by 27 percent, of those with no schooling and basic education by 18 and 11 percent respectively. The overall gender earnings gap narrows under the ECEC expansion scenario while it further deteriorates under the construction spending scenario. The substantially higher number of jobs created via ECEC spending has the potential to generate labor earnings at 81.1 million JD per month with almost 60 percent accruing for female job recipients. The labor earnings generated via construction spending of similar magnitude, is estimated at 27 million JD per month, where women’s share is at a meagre 3.2 percent.

These findings underline that the integration of the ECEC services as a target sector into Jordan’s economic growth vision has the potential to unlock a virtuous cycle of inclusive growth through substantial employment creation and earnings generation, while simultaneously narrowing gender gaps and decreasing inequalities amongst children and households.

[1] These labor force statistics include both Jordanians and non-Jordanians. The rate of employment for Jordanians is even lower at 25.8 percent, and unemployment rate higher at 24.1 percent.

[2] See for NES 2011–20, Ministry of Planning and International Cooperation MoP 2010, p.1; for NEPP 2021–23 MoP 2021; for FYRM 2019-2024 MoP  and for the EMV 2023