Mothers who face high childcare costs work fewer hours, according to new research published by the ESRI and Pobal.
Key findings from the report were that:
- Parents spent an average of 12% of their disposable income on childcare for their three-year-old, rising to 16% for lone parents and 20% for those on low-income.
- Exclusion from the labour market due to childcare costs is associated with poverty risks and household joblessness.
- The average hourly cost of care for one child was €4.84 in 2017
The report found that mothers with higher childcare costs at age three tended to work fewer hours when their child was aged five.
The study used Growing Up in Ireland data to track the employment of mothers across the first five years of the child’s life. The estimate was based on one child, so the impact on families with more than one child will be much greater.
Between the ages of three and five years almost half of mothers (45%) changed their employment hours, including 9% who left employment.
The ESRI research comes just one week after the National Recruitment Federation warned in a pre-budget submission to the government that women over 35 in Ireland were being pushed out of the workforce due to childcare costs, and that the participation of women in that age group was lower than anywhere else in the EU.
The costs are based on one child and so the burden is more severe for families with more than one child in childcare.
How much do parents pay for childcare?
A majority (54%) of parents put their child in a creche, while 23% used a childminder and the other 23% had their child cared for by a relative.
Of the ones taken care of by relatives, 55% didn’t pay that family member to take care of their child.
The average costs depended on the type of childcare used:
- For a childminder in the family home: €6.13 in 2017 prices
- For a childminder outside the home: €4.76 at 2017 prices
- For centre-based care parents paid an average of €4.82 at 2017 prices
Costs were higher for those living in Dublin, East Leinster and other urban areas. The financial burden was greatest for lone parents, who spent an average of 16% of their disposable income on childcare and for low-income families, who spent 20% of income on care.
These figures represent the cost before the child was eligible for the free pre-school year so are indicative of the costs that families face before they are eligible for that support.
The research indicates that greater government support for childcare costs will increase maternal employment
What can be done to improve the situation?
With a broad range of politicians and commentators today calling for more funding to be allocated to childcare in the upcoming budget, where exactly should that money go?
According to the ESRI, “The research indicates that greater government support for childcare costs will increase maternal employment. Childcare costs are a greater barrier to employment for households with lower incomes, indicating that targeted supports are required for low-income families.
Policies to address childcare costs are also important from a poverty perspective, as exclusion from the labour market due to childcare costs is associated with poverty risks and household joblessness.
Additionally, increased female employment contributes to the sustainability of the welfare state through increased tax receipts.”
Minister for Children and Youth Affairs, Dr Katherine Zappone, responded to the findings saying:
“We are correcting decades of under-investment and this will take a number of budgets. In addition to measures which I hope to secure in Budget 2019, my officials have also been putting in place the legal, administrative and IT infrastructure so that the new Affordable Childcare Scheme will become a reality in the coming year and benefit children, parents and providers for generations to come.”
In response to the research today, Chambers Ireland said it was calling on Government to prioritise sustained, value-for-money investment in the provision of childcare and early childhood education.
“We have asked Government to deliver the prompt roll out of the affordable childcare scheme, increase funding for childcare services and conduct a value-for-money cost analysis on the delivery of childcare provision to ensure that further investment contributes to making childcare more affordable for parents.”
Labour spokesman on Children and Youth Affairs, Sean Sherlock went further by calling on the Government to analyse not just the affect on families, but also on workers within the sector.
“In many parts of the country parents are paying over €1,000 a month per child. The upcoming budget in October must address high childcare costs, by providing an increased subsidy to both parents, and providers. More action is also needed to ensure staff in the sector receive a proper salary commensurate with their qualifications and duty of care to our children.”