Greater childcare resources may not attract women back to work, says economist

Research shows leaving work to care for children results in much lower wages later in life

“We get a sense that many households are in fact very far from changing their mind [about domestic childcare] and no amount of childcare policy is going to change their decision,” Dr Hélène Turon from the University of Bristol told the ESRI. Photograph: Getty

“We get a sense that many households are in fact very far from changing their mind [about domestic childcare] and no amount of childcare policy is going to change their decision,” Dr Hélène Turon from the University of Bristol told the ESRI. Photograph: Getty

 

Increasing subsidies within the childcare sector would not necessarily lead to a rise in female participation in the labour market as many parents prefer to care for their children at home, research presented to the Economic and Social Research Institute (ESRI) has highlighted.

A study carried out by Dr Hélène Turon from the University of Bristol found that a change in the perception of the quality of the childcare market, or a move away from the “peer pressure” that exists for parents to care for their children at home, could encourage more parents – for the most part mothers – to return to work.

“We get a sense that many households are in fact very far from changing their mind [about domestic childcare] and no amount of childcare policy is going to change their decision,” Dr Turon told the ESRI. “My estimates seem to suggest we’ve got a fairly small scope for getting more mothers back into the work force by making childcare more accessible.”

Dr Turon’s research also showed that taking time out of the labour market to care for children resulted in much lower wages later in life. She also warned of the implications for a parent who leaves work to care for children if the couple choose to divorce at a later stage in their lives. She said the parent who has cared for the children will have “less bargaining power” when it comes to the divorce settlement.

Survey

The study examined more than 3,200 two-parent British households followed as part of the British Household Panel survey which ran between 1991-2008.

It revealed the earnings of a parent who has been out of the workforce for a decade can drop by more than 25 per cent when they return to work. The research also found the mother was more likely to work part-time and look after the children even if the woman’s earnings were higher than the man’s value before their first child was born.

Funding for early learning and childcare schemes was increased by €90 million to €574 million under Budget 2019. This included the early childhood care and education (ECCE) which becomes universal for children from September of the year they turn three for two years. However, it is only available for three hours a day, Monday to Friday, for 38 weeks of the year.

Widening access

The affordable childcare scheme (ACS), which targets low-income families also benefitted under the latest budget and from next year income thresholds for the scheme will go up, widening access for families.

However, the budget gave no clear strategy on increasing capacity in the sector and improving pay for childcare workers. Most of those working in early child education and childcare earn little more than the minimum wage while staff turnover in the sector is in the region of 28 per cent annually. Despite the latest budgetary increases, Ireland will spend just 0.2 per cent of its GDP on early years education this year, compared to an EU average of 0.7 per cent and 1 per cent in Sweden.