The Economy of Care: An Aging Population and a Growing Need

As life expectancy climbs and the Baby Boomer generation crests into its golden years, the demand for elder care is reaching an unprecedented peak. The care economy, including elder care and home health jobs, is still growing in the post-pandemic labor market:  these essential workers are on the front lines of a massive shift in healthcare, providing companionship, critical care, and a lifeline for an increasingly vulnerable population. But the skills needed in these jobs are changing, and demand for them is outpacing supply. 

The care economy overall has grown 35% over six years, from 2.3% of all U.S. job postings in 2017 to 3.1% in 2023, Lightcast job postings show. On top of that overall increase, demographic trends are reshaping the kinds of care that people need most: the skills being requested in job postings have shifted toward more holistic and humanistic care, and the need for different kinds of jobs within the sector has moved toward more equal distribution.

The skills needed in the care economy are evolving. More relational, human-centered abilities like communication, compassion, caregiving, personal care, and companionship are now in higher demand, and domestic skills like home health care, housekeeping, and meal planning are also more valued as home care takes center stage. On the other hand, more technical therapy-specific skills (like physical therapy or treatment planning) have declined.

The 2020 US Census showed that about 1 in 6 people were age 65 and over—55.8 million, or 16.8% of the US population. That figure was 40 million in 2010 and projected to reach over 80 million by 2040. The home health sector has seen the biggest increases, becoming the largest sub sector at 38.7% of care economy roles in 2023 (+15.5% since 2017). Child and school care (23% of roles) and social work (5.3%) have also grown their shares.

As demand across these specialties has shifted—a sharp increase in home health needs in 2020, rising demand for therapists in 2023, and slow but steady growth in postings for social workers—the overall makeup of the care economy has changed as well, leveling out to a more equal distribution over the past several years. Increases in home health workers have led this change.

Across all of these kinds of jobs, workers are sorely needed. A composite Job Postings Index, measuring demand for those positions, has risen steadily over the past several years, while the counterpart Employment Index, measuring how many people are working in the industry, has been much more level. So while overall demand for workers has cooled since its highest point in 2022, this is one facet of the market where workers still have plenty of leverage and competition for talent remains tight.

As the population ages and life expectancies rise, the need for home-based support and elderly companionship will likely continue growing, putting pressure on those hiring to manage their talent pipelines well, and opening new doors for workers who can provide skilled, compassionate personal services.