Breaking the divide: Can public spending on social infrastructure boost female employment in Italy?

This study investigates the impact of public spending on social infrastructure — including education, healthcare, childcare and social assistance — on the gender employment gap in Italian regions over the last two decades. Using a Panel Structural Vector Autoregressive (P-SVAR) model, we assess how these investments, while not explicitly targeting women, may plausibly support female employment—potentially by reducing the extent of unpaid care work and by creating jobs in care sectors that predominantly employ women. Our findings show that social infrastructure spending has a positive and long-lasting effect on private investment, GDP and employment across all regions. However, a reduction in the gender employment gap is detected only in Southern Italy and is limited to high-skilled women. These results highlight the need for targeted policies to address regional disparities and promote a more inclusive labour market, particularly in the South, where underinvestment is most severe. • We investigate the impact of social infrastructure spending using P-SVAR model • Public spending boosts investment, GDP and employment across all Italian regions • Favourable yet transitory effect on the gender employment gap • Gender employment gap narrows in South and for high-skilled women after fiscal shock • Results emphasise the need for targeted policies to reduce regional disparities