The development of formal PHS activities might have a number of s positive effects on society. What is more, potential demand for PHS and the potential PHS workforce is high and increasing.

However, several obstacles hinder the development of the PHS activities and imply that, without supporting policies, the formal PHS activities would not be developed adequately or successfully. More specifically, in the absence of supporting policies, the quantity of formal PHS would be too low and its cost would be too high.

The main reasons why supporting policies are necessary are as follows:

• The unfair competition of undeclared labour;
• Household demand is below its potential;
• Positive externalities are not taken into account – household demand is below social demand;
• Various supply-side obstacles.