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Childcare costs in Europe affect poor families disproportionately

19/06/2014

In several European countries, childcare costs place a heavy burden on working parents. A recent UK report has emphasized that the average annual costs of childcare have seen sharp rises in the past years and have grown beyond the average yearly mortgage payments. According to the OECD, the average cost for childcare for all OECD countries is 11.8% of parental net income (calculated on a family where two parents earn average wage).  In Europe, this figure ranges from 26.6% for the UK to 4.9% for Greece.  In addition to the limited affordability, a European review on childcare services found that the availability of childcare is also limited both in terms of care facilities on offer and the opening hours of structures.

Childcare costs impact career choices

Recent reviews of the Barcelona targets, which aim at providing childcare for at least 90 % of children between 3 years old and the mandatory school age and at least 33 % of children under 3 years of age, have pointed to the detrimental effects that lagging behind these targets has for the European economy. High childcare costs create incentives for parents (overwhelmingly mothers) to not return to full-time jobs in order to save on childcare.  The ad hoc module of the 2010 Labour Force Surveypdf Choose translations of the previous link  found that 53 % of mothers who declare that they do not work or that they work part time for reasons linked to formal childcare services consider price to be an obstacle. This figure was higher than 70 % in Ireland, the Netherlands, Romania and the United Kingdom. Female participation in the labour market, which is one of the priorities of European social policy, is therefore negatively impacted by the limited affordability and availability of childcare. Reduced participation rates in turn result in lower income and quality of life for the families while children may miss out on early childhood education that is crucial to counter the hindrances that come with being born in disadvantaged households.

European systems struggle to ensure equal access to care

All European countries offer government subsidies and regulation support to early childhood carepdf. These measures include tax breaks, vouchers,  subsidies paid to parents or to the care provider; and in several European countries, capping of childcare costs relative to household income, or by obliging employers to support childcare costs (for instance in the Netherlands). Differences in support systems also make it difficult to comparepdf the ultimate costs of childcare arrangements between countries. However, studies found that regardless of the configuration of incentive and subsidy systems, many European societies are currently not succeedingpdf in ensuring equal access to childcare and ECEC. Comparative data such as the OECD family database show that, regardless of the cost structure of childcare, higher-income families benefit disproportionately from these services compared to the poorest families. Only in a handful of countries (Denmark, Sweden, Slovenia and Germany) were childcare utilisation rates higher among lower income families or equal between income groups. Ultimately, affordability and accessibility of childcare remains a daunting challenge for governments across Europe.

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