Mothers’ labour market participation and use of childcare in the UK Mike Brewer Institute for Fiscal Studies

Outline Mothers’ labour market participation Based on Brewer and Paull (2006), DWP RR 308. Trends in childcare use in the UK Based on Brewer and Shaw (2004), DWP WP 16. Government policy and childcare

I. Mothers’ labour market participation Women with young children less likely to work than woman with older children Having children has a dramatic impact on women’s labour market participation (and hours of work, wage) Most women go back to work eventually, but not necessarily permanently School entry also a critical time, with relative high numbers of mothers stopping and starting work Based on Brewer and Paull (2006), DWP RR 308.

Women with young children are less likely to work than those with older children... Source: Derived from FRS 2005/6. Sample: women with children under 14.

...because having children has a dramatic impact on women’s labour market behaviour. Source: Fig 5.1 of Brewer and Paull (2006), DWP RR 308. Sample is all adults with children. Derived from BHPS and FACS, so covers children born 1990-2003.

Most women go back to work eventually, but not necessarily permanently. Source: adapted from Fig 5.9 of Brewer and Paull (2006), DWP RR 308. Sample is all women who have a birth. Derived from BHPS and FACS, so covers children born 1990-2003.

I. Mothers’ labour market participation Women with young children less likely to work than woman with older children Having children has a dramatic impact on women’s labour market participation (and hours of work, wage) Most women go back to work eventually, but not necessarily permanently School entry also a critical time, with relative high numbers of mothers stopping and starting work

II. Trends in employment and childcare use No good source of data for all children that is consistent over time 4 large household surveys (FRS, FACS, LFS, Childcare and EY Provision) but each has problems, and generally not consistent with each other. Why? Perspectives on childcare vary across government and over time Parents have range of ways of thinking about “childcare” (which may be different from policy-makers or survey designer) (Brewer and Shaw (2004), DWP WP 16) Childcare or early year’s education? After-school activity or Ofsted-registered After-School Club Informal care Recent convergence on questions ask about instances where child not at (full-time) school nor in parents’ care

Employment and childcare use: summary Employment rate still rising amongst lone parents, but not amongst mothers in couples Amongst working families Since 2001, little trend in overall use of childcare Longer trend may be for formal care to replace informal Little change in % who pay for care, but rise in amount paid Limited data on price shows real rises between 2001 and 2004-2005

Trends in mothers’ labour market participation Source: Own calculations from FRS and LFS, various years. Sample is all families with children under 14.

Trends in childcare use amongst working families Source: Own calculations plus Brewer and Shaw (2004), DWP WP 16. Sample is working lone parent families and couples where the mother works all with children under 14. Data from FRS collected all year round, LFS in October and November. FRS 2005/6 not consistent with previous years of FRS and therefore shown separately.

Trends in formal childcare use amongst working families Source: Own calculations plus Brewer and Shaw (2004), DWP WP 16. Sample is working lone parent families and couples where the mother works all with children under 14. Data from FRS collected all year round, LFS in October and November. FRS 2005/6 not consistent with previous years of FRS and therefore shown separately.

Trends in informal childcare use amongst working families Source: Own calculations plus Brewer and Shaw (2004), DWP WP 16. Sample is working lone parent families and couples where the mother works all with children under 14. Data from FRS collected all year round, LFS in October and November. FRS 2005/6 not consistent with previous years of FRS and therefore shown separately.

Trends in formal childcare (including EYE) use amongst under 5s in working families Source: Own calculations plus Brewer and Shaw (2004), DWP WP 16. Sample is under 5s in a working family. Data from FRS collected all year round, LFS in October and November. FRS 2005/6 not consistent with previous years of FRS and therefore shown separately.

Trends in formal childcare use amongst school-age children in working families Source: Own calculations plus Brewer and Shaw (2004), DWP WP 16. Sample is children aged 5-14 in a working family. Data from FRS collected all year round, LFS in October and November. FRS 2005/6 not consistent with previous years of FRS and therefore shown separately.

Do parents pay for childcare? Source: Own calculations plus Brewer and Shaw (2004), DWP WP 16. Sample is working lone parent families and couples where the mother works all with children under 14. Data from FRS collected all year round. FRS 2005/6 not consistent with previous years of FRS and therefore shown separately.

What do parents pay for childcare? Source: Own calculations plus Table 3.11 of Brewer and Shaw (2004), DWP WP 16 & Table 5.20 of Bryson et al (2006), DfES RR 723. FRS, FACS and PDFC sample is working lone parent families and couples where the mother works all with children under 14 and who paid for childcare. FRS, FACS and PDFC measure mean spending per hour per child; C&EY survey measures median cost of childcare per hour per child including contributions from others. 2005 prices.

III. Government policy and childcare Economic case for supporting childcare Gains to childcare long-term and/or go beyond the family “Quality” needs regulating Pure market approach may not be equitable Goals for this Government Childcare for children’s benefit Childcare to help parents balance work and family (10 Year Strategy, December 2004) Main interventions follow this divide: Free nursery places for 3 and 4 year olds (c£3bn) Childcare tax credit (c£1.3bn in 2007/8) for working parents and means-tested

Policy questions Increase quality or improve affordability or substantially increase subsidies ? Make subsidies less or more conditional on parents working? Make subsidies less or more related to family income? Direct support to providers or parents?

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