The report by the Economic and Social Research Institute showing that the high cost of childcare in Ireland is a major factor in discouraging women from participating in the workforce should prompt serious attention from the Government.
The conclusions are hardly surprising, but they do provide official confirmation that the costs of childcare are a serious burden for families and tend to militate against greater participation by women in the workforce. The report found that parents with one child aged three typically spent about 12 per cent of their disposable income on childcare and this figure rose to 16 per cent for lone parents and was up to 20 per cent for lower-income households.
The cost of childcare has become an increasingly important issue as the proportion of women with young children in the paid workforce has risen significantly in recent decades.
Although the report does not compare the cost of pre-school childcare in Ireland with that of other countries, a number of surveys have suggested as a proportion of household income it is higher here than in most other western economies.
Currently the employment rate for mothers in the Republic, where the youngest child is aged three to five, is 54.5 per cent compared to an OECD average of 68.8 per cent. This is due, partly at least, to the costs of childcare, which discourage women from remaining in the workforce or from taking on more work.
Economists are agreed that getting more women into the workforce is one of the key measures required to ensure that sustainable economic growth continues. Of course, participation in the workforce has to be a matter of choice and a significant number of women make a conscious decision to spend time caring for their children, particularly in the early years.
More flexible working conditions to allow women to remain in the paid workforce on a part-time basis when their children are very young can also play an important part in improving the participation rates in the labour force.
However, it is the cost of childcare that appears to be the main stumbling block to increasing the number of women in the workforce, and that is something that Minister for Finance Paschal Donohoe needs to examine very carefully in the budget. To be fair, the Government has made efforts to address the issue in recent budgets. Minister for Children Katherine Zappone has pointed out that investment in childcare has increased by 80 per cent since 2016 across a range of schemes.
The Early Childhood Care and Education Scheme has been extended just this week to provide free care and education for children between the ages of two years and eight months up to 5½. It is an important step forward, but a greal deal remains to be done.