Since the introduction of the NDIS, the care economy has expanded sharply. Fair Work Commission decisions have also delivered strong wage growth in a predominantly female sector. Together, this has narrowed gender gaps in both employment and pay, especially benefiting younger women. This has transformed the labour market, including:

• Improved employment prospects for women under 35: Rising labour demand in the care sector has been met disproportionately by young women, for whom it has become the most common destination from non-employment. Since the pandemic, their unemployment rate has averaged around 1 percentage point below that of men the same age – the largest gender gap in either direction in two decades. This has been driven by the fact that young women are now more successful than men at transitioning to work from unemployment, the opposite of what happened during the mining investment boom.
• A narrowing of the hourly gender pay gap: down by around 3.5 percentage points over the past decade, from 11.5% to 8%. Rising wages in the care economy account directly for about 0.5 percentage points of this reduction, with spillovers likely adding further gains for women with similar characteristics outside the sector. Women now out-earn men per hour, on average, from age 15 to their early 30s. Despite wage gains, care jobs still lag most other jobs on flexibility, pay, opportunities for progression, and overall job satisfaction.
• Increased job security: Care jobs offer job stability due to government backing and ongoing sector growth. This shift has marginally reduced overall job-loss risk and dynamism across the labour market. On one hand, this is a win for workers who receive greater job security, both within the care economy and through the pressures it places elsewhere. On the other, it may be dampening productivity-enhancing channels in the labour market: for instance, job-to-job transitions are less common for care economy workers, and lower displacement rates may lengthen poor employee-employer matches.