Workplace child care in Gulf countries would help employed mums. What gets in the way?

As female labour force participation continues to rise in the Gulf countries, there are growing calls for the region’s businesses to provide daycare to support their women employees. Policymakers need to tread carefully because poorly formulated legislation sometimes ends up hurting the very group it is trying to help.

The Gulf countries have realised significant progress in women’s economic, political and social inclusion during the 21st century. It is now normal to see women leading businesses, sitting on corporate boards and occupying senior government posts. Despite this progress, there exists room for improvement in terms of equal representation in senior economic and political posts. For this reason, those supporting women’s empowerment frequently advocate for government interventions that can further assist women in realising their workplace potential.

Among the policies that garner support is the legally mandated provision of workplace childcare for female employees. The attractiveness of this intervention stems from the realisation that women’s professional progress is potentially impeded by the need to provide adequate childcare for their young offspring, especially when a child is too young for school.

Workplace childcare provides mothers with the opportunity to interact with their children throughout the day, whether it is nursing or simply reading a story during the mother’s break. It also gives the mothers peace of mind that potentially allows them to achieve higher levels of productivity – and to maintain superior levels of mental health – than would be the case were the child to be at home with a nanny, or in a third-party daycare.

According to some advocates of mandatory workplace childcare, companies are capitalist institutions unmoved by the needs of modern mothers, and indifferent to the harmony-inducing benefits of a gender-equal workplace. Alternatively, they may suffer from a legacy of patriarchal thinking that makes them blind to the returns from having lower turnover in female employees. In both cases, they need to be coerced into contributing to the mission of female empowerment by being legally required to provide childcare, especially if the entity is sufficiently large.

While the logic of this argument appears convincing at first, when one delves into various operational details, difficulties begin to emerge. The first is the existence of significant economies of scale in the provision of childcare services, meaning that those operating a higher scale can realise large unit cost savings compared to those with minimal scale.

To see this more clearly, note that a childcare facility has some costs that increase more or less proportionately with the number of children being cared for, such as the number of carers or the number of toys. However, a significant proportion of the cost is overhead or quasi-overhead, meaning that when you increase scale, that fixed cost gets spread out over a much larger number of units. This includes administrative, information technology and legal costs, in addition to providing medical supervision. Play space, such as playgrounds, are also quite “sticky” as costs.

As a result, it is much more efficient to have – hypothetically – two childcare facilities serving 30 children each than it is to have 10 childcare facilities serving six children each. Certainly, in the case of an office tower with thousands of employees, having a shared, building-level childcare facility is economically sound. However, for smaller workplaces such as a bank branch, a clothing store or a coffee shop – where many Gulf women work – mandating an establishment-level childcare facility is both costly and highly inefficient.

Cost concerns are further magnified in the Gulf because small- and medium-sized enterprises remain nascent and ill-equipped to absorb the large increase in operational costs that a childcare facility would entail. For a variety of historical reasons, the region has struggled to nurture growth in small businesses, a point of emphasis in the Gulf states’ economic visions, making 2024 a very risky time to gamble on their ability to provide an expensive service such as childcare to their employees without being able to charge them the full cost.

Accordingly, mandating workplace childcare creates a dual risk from the government’s perspective. On the one hand, if businesses are compliant in spirit and in writing, they risk going under as they can’t cope with the added costs. On the other hand, they may pursue tacit evasion strategies, such as offering women even lower wages (to cover the expected childcare cost), or simply hiring fewer women to bypass the regulations entirely. These would be classic examples of a well-intentioned government policy backfiring.

Some of the calls for this kind of legislation come from outside the Gulf, from westerners who are unfamiliar with the local context. Childcare for a working mother is challenging anywhere in the world, but it is especially so in the US, where government provision of childcare for infants is very limited, and where childcare services are extremely expensive.

In the Gulf states, the continued importance of the extended family to daily life – and the ease of procuring live-in domestic helpers for relatively low wages – means that the problem is considerably easier to overcome. Many Gulf working mothers leave their young children with a live-in nanny under the supervision of either of the child’s grandmothers for a negligible cost. That’s not to say that Gulf women’s desire for workplace childcare should be ignored; however, in a world of economic trade-offs, there may be alternative options for allocating society’s resources that yield a higher return in light of the local context.

A key lesson to keep in mind is the importance of approaching the issue of workplace childcare in a non-adversarial way. That means engaging businesses as partners invested in the success of their female employees, rather than as capitalist overlords who delight at putting their employees through a corporate meatgrinder. Or, as the American homiletician Halford Luccock once quipped: “No one can whistle a symphony. It takes a whole orchestra to play it.”