How should we think about childcare?
Compensating parents vs daycare for daycare's sake
I’ve been reading and talking a lot about UK childcare policy lately and wanted to write down my synthesised thoughts on the topic.
I’m going to split this into two posts: Part One (this one) is on how we should think about the problem, and Part Two (coming soon) will discuss some potential solutions.
Why is childcare an issue?
The fundamental issue is that producing and caring for children is work which is essential to a functioning society, but which sits outside our economic system because it occurs in the private sphere and does not involve money changing hands.
Generalising enormously, the way this worked in the past was that women were not full participants in society. The economic unit was the household, with women (producing value within the household, including by producing children) subservient to men (participating in life outside the home nominally on behalf of the household). But in the recent past, a seismic shift has occurred in how society is organised: we no longer see women as chattel but as individuals in their own right. The difficulty arises because we haven’t quite established how what used to be women’s unpaid work within the home fits into this new model. We expect women to compete as economic agents on an equal footing with men, but they are also expected to gestate, birth and raise children, which can easily be a full time job in itself.
Again generalising enormously, while the model of the past was horribly inequitable, it did at least mean that two adults were being expected to perform the work of two adults: one taking care of the home and supervising children, and the other earning an income to provide for the whole family. By contrast, the norm that both parents will bring in an income (as well as other recent developments like runaway house price inflation) means that to have an average standard of living, you will probably need both parents to be earning, while at the same time childcare still needs to be done. Therefore, two adults in a family with children are now expected to perform the work of three adults. This is not a circle that can be squared without seriously rethinking the kinds of support individuals can expect from each other and from the state.
This is a condensed version of an argument I made last year in an article for Works In Progress, which you can read here.
Care of children is the biggest barrier to women’s economic participation, and we know that the gender pay gap is essentially a maternity pay gap: women are on par with men until they have children, after which their earnings drop behind and never catch up. A lifetime of accumulated pay disparities means that women retire with significantly smaller pensions than men across every OECD country.
Think of what money means. Convenience; peace of mind; the freedom to take risks, or to leave situations of abuse; the luxury of following your conscience; the ability to indulge yourself, or to be generous to others. An economic system in which a baby girl can expect less of all this over a lifetime than her brother, in return for a contribution to society no less essential, is fundamentally unjust.
As well as this, there are practical disadvantages to society as a whole if childcare is not adequately supported. If women’s careers are excessively hampered by having children, we’re likely to end up with an inefficient allocation of skills. Having women spend years in education only to find they can no longer progress in their chosen field after taking time out to have children is a waste of talent; frustrating on a personal level, and suboptimal on a population level, too. And secondly, as I wrote about at length in Works In Progress, insufficient support for childcare inevitably means that fewer children will be born, which is both societally problematic and a personal tragedy for many couples.
The current approach isn’t working
UK government policy has been to subsidise extrafamilial childcare via free hours of nursery/daycare (15 hours for children aged 3-5, 30 hours for those who are especially disadvantaged), tax-free childcare (like the “help to buy” scheme: bank accounts that the government tops up as a tax rebate, which can then be spent on childcare), and local authority funding for nurseries and daycares. This is on top of state schools, which effectively provide free childcare for core hours of the day during term time for children aged five and above.
Despite the public money that’s gone into it, childcare remains a huge financial burden to families. The UK has some of the most expensive childcare in Europe, and real-terms costs have been increasing for years. Estimates vary, but generally speaking, putting a child in daycare or nursery can easily be as expensive as the mortgage on a family home. What’s more, places are in high demand: anecdotally, I’ve heard multiple times that if you wait until your child is born to join waiting lists, it can be too late- those who know better sign up as soon as they conceive. This burden naturally means fewer children are born, as it’s just not affordable for couples to have as many as they would like.
How is this possible? True, our public spending on childcare as a fraction of GDP is towards the lower end of OECD countries, and roughly half that of the Nordics and France, countries famed for their family-friendly policies. Still, though, public spending in the UK has roughly doubled since 1990- while costs to parents are consistently rising at above inflation and becoming more and more unaffordable.
Where is all the money going? And why hasn’t the supply of childcare increased to meet demand?
The main point of public support of childcare- surely!?- ought to be to make it easier, financially and/or logistically, for parents to organise care for their children. On that measure, the approach currently taken has not been a success.
Why fund childcare?
When considering what the ideal policies would be, I think it’s important to have a consensus on what we specifically hope to achieve by intervening. There are lots of justifications you could give for state subsidies of the care of children, but it’s rarely explicitly stated what the main aims are- generally it seems to be considered to go without saying. But I think this makes it difficult to avoid talking at cross purposes, to decide between competing strategies, or to know when a strategy has been successful.
The aims of childcare policy could include:
A) To prevent children/women/families from living in poverty;
B) To compensate parents, especially mothers, for the positive externality they provide by having children, at some cost to themselves;
C) To help women return to work after having children;
D) To give social and educational benefits to children.
The order I’ve listed these is, in my opinion, their order of importance as justifications for government intervention. A comes first, because the alleviation of poverty is one of the most basic objectives a state should have, after guaranteeing military defence, upholding law and order, and providing basic public infrastructure. Without state support, lots of families (especially single parent families) would be really impoverished by the costs of raising children- to a greater extent than they are currently- and mitigating this is probably the most immediately urgent problem a childcare policy should have to fix.
I would argue that once A is addressed for the lowest income families, the primary aim of state support for children and childcare should be B, because this is a matter of simple fairness and correcting a market distortion (the fact that parents provide a large positive externality). We all have an interest in the next generation being gestated, birthed, fed, clothed and educated, but the way our economy is structured means that it is impossible for the individuals who wish to perform this useful work to do so without putting themselves at a very substantial disadvantage- that is, if they can afford to do so at all.
C and D are side benefits of B for many individuals. Many women are passionate about their careers and want, specifically, to be supported to return to work full time (aim C). And having the opportunity to learn and interact with other children and adults outside the home can be beneficial for preschoolers, especially those from deprived backgrounds (aim D). However, an over-focus on these two aims can come at the cost of creating significant inefficiencies in achieving B, which, unlike other aims, is relevant for every single family. This in my opinion is what the UK is currently doing.
When state help with childcare was introduced in the mid 20th century, it was more explicitly geared towards aims D and A: nurseries run by local authorities were seen as a health and social intervention for disadvantaged children, and as a way of supporting single mothers (including war widows) who had no choice but to find a job. Aim C, enabling the employment outside the home of mothers of small children as default rather than as a rare case, came about later, after economic and attitudinal shifts meant it was no longer the norm for families to support themselves on the father’s income only.
In our current system, the gap of at least one year between the end of statutory maternity leave entitlement (52 weeks total, beginning before a baby is born) and the beginning of any statutory childcare entitlement (usually when a child is 3 years old, or 2 in the case of those from more deprived backgrounds) is (I think?) a hangover from the time when most mothers of preschoolers looked after them full time, and nurseries were mostly about preparing children for starting school.
Aim B, simply supporting parents as a matter of principle, is a lot more radical. Since becoming interested in this area I have been surprised by how rarely state intervention is discussed in these terms. But if you do think about it in these terms, then the ideal solutions can look somewhat different to the ones we have.
The ideology of daycare
In the UK, mothers are “nudged” to go back to work as quickly as possible after the birth of a child. Much of the help with the cost of raising children is effectively in the form of vouchers that can be used to buy OFSTED-certified childcare; if instead you want to take a break from employment to look after your child personally, you forfeit these benefits. Plus, the fact that married couples with children are taxed as separate individuals means that the same gross family income can give considerably more take-home pay if it is spread over two earners, with two tax-free allowances, than a single earner with one parent staying at home.
I think this is done for both fiscal and ideological reasons. First, if both parents of a small child are in employment, you generate more incomes to tax: the salaries of both parents, plus the salary of a nanny or childminder or whoever they pay to look after their offspring. The mother’s salary may end up essentially all going on childcare, so by encouraging her back to the office you’ve effectively created a salary that can have tax skimmed off twice: once as her income, and then once again in diminished form as the nanny’s. By contrast, if she stays home with her child for a few years, this creates zero taxable incomes.
Second: ideology. Although until recently it was seen as obvious that generally, mothers would want to look after their own children (at least while they were very small), nowadays this assumption is seen as a bit dated and perhaps anti-feminist. The increasingly common practice of mothers expressing and storing breast milk during the work day is a sign of this change in attitudes. Half a century ago, the idea that women should, as the norm (I’m not talking about women who have an exceptional drive to return to work- good for them) be separated for the majority of every working day from their unweaned infant would have seemed insane.
The progressive, neoliberal view is that we should aim for women to be liberated from anything that holds back their ability to work “like a man”- ie, like someone who has a wife at home taking care of their children. Care responsibilities within the family do not fit neatly into this worldview. There is a failure to recognise childcare as work unless it takes place in a designated workplace, by unrelated individuals who are employed to be there, which “officialises” the work and allows it to be seen by the system.
This is a bit of a chicken and egg problem: we don’t recognise parents looking after their own children as work because no money changes hands; because it is not recognised as work, there is a reluctance to provide financial support for it. In a way, providing state support in the form of childcare vouchers enables us to ignore the scale of the work that is taken on when people have children, as it implies that if you bung some money at facilities where the mother of a one-year-old can drop off her baby for some hours of the day, this puts her on an equal economic footing with her childless colleagues.
I also think some ideological attachment to daycare stems from a belief that “experts” should manage the raising of children and that parents themselves, or extended family members, can’t be trusted with it. (They might be thickos! They might have unpalatable beliefs! They most likely do not have any qualifications in childcare!).
In a recent Woman’s Hour special on childcare, Neil Leitch, CEO of the Early Years Alliance, explains that he sees the primary purpose of the childcare system not as just looking after children but educating them and supporting their development. “If we […] get it wrong in terms of their education, their development, they will cost us hundreds of thousands of pounds further down the line. This is about intervention, this is about prevention, this is about investment.” He mentions so-called “feral children”, including the story of “a fourteen year old that stabbed a thirteen year old”, with the moral being that “they were three year olds at one particular point in time. That’s why we need to invest.”
That’s all very well- and unlikely though it sounds, if you can demonstrate that your nursery school really does have a protective effect against later knife crime, that’s fantastic- but I would argue this is a major distraction from what we should be focused on, namely, financially supporting the care of children, not worrying that they will become “feral” if left to the care of their parents. The idea that we need to “intervene”, as Leitch puts it, in any but the tiny proportion of families where children are neglected or abused, is not only wrong-headed and patronising but also should not be the primary focus of a system for funding the care of children.
This is also the attitude behind the legislative bloat surrounding childcare. A mum with kids of her own can’t set herself up as a childminder (which legally allows her to accept money to look after her friend’s kids at the same time- otherwise illegal!) without jumping through huge numbers of hoops to become OFSTED-registered. And don’t get me started on the Early Years Foundation Scheme (why on earth is it mandatory for someone to submit mountains of paperwork demonstrating that a two year old is progressing in a curriculum of subjects rather than just letting them play?).
The same impulse that means we don’t trust parents to parent means we don’t trust childcare providers to do a good enough job without onerous levels of oversight. I’m not talking about stuff like DBS checks and first aid training- that seems proportionate. But it’s very easy to lose sight of all proportion when you can point to possible improvements in the welfare of children as the justification for ratcheting levels of red tape. Who wants to oppose something if you’re told that without it, children might stab each other ten years down the line? If we make the provision of vaguely defined “quality childcare” our primary aim, then we risk more and more time and money being diverted into chasing after ever-shifting goalposts of “quality”, instead of stepping back and allowing subsidies to do their job and make childcare cheaper for parents.
Happy families?
Basing our childcare system on the ideology of daycare may come at the cost of life satisfaction. In recent polling by CSJ, 78% of parents of small children said they would like to spend more time with their child than their job allows them to. Another report, by Onward, found that when parents were asked what they would do for childcare if money was no object, the most popular choice by a large margin was “Myself or my partner would stay at home instead of going to work”. What’s more, while there can be a benefit to children of some extrafamilial childcare, evidence suggests that attending childcare for full working hours, or at too young an age, is worse for children’s development.
So essentially, much government support for parents is conditional on them making childcare arrangements that on average they don’t want and may be worse for their children. This system of support could perhaps be justified if it provided more value for money for the taxpayer. But if we believe that the purpose of the system is B (reduce costs to parents and make children affordable) rather than C (get women in full time employment for the sake of it) or D (put children in daycare for the sake of it), then the extremely high financial burden parents continue to face would suggest that this system is not very effective at all.
One final thing to consider: The fertility gap
When considering what childcare support is for, it’s crucial to note that in the UK, people currently don’t have as many children as they would like: as of 2020, the average woman has below 1.6 children, whereas men and women both report wanting 2 to 3 children. This means that on average there is one child in each family that is never born, even though it is wanted. One of the main reasons for this gap between desired and actual fertility is that having children is simply too expensive: there are many anecdotally reported cases of couples who would dearly like to have a second child but find that, with the cost of childcare being what it is, they just can’t make the numbers add up.
If we assume that the aims of our childcare policy are to support the 1.6 children per woman that are currently born, or support women to go back to work after having them, then we don’t see the fertility gap as a failure of the childcare system. We could decrease the effectiveness of support further and further, have families adapt by having fewer and fewer children, and never see this as a problem, because the childcare system could always be achieving its stated aim of adequately supporting all the children that people do have.
But if we explicitly focus on aim B, to compensate parents for the costs they incur by having children, then the failure becomes apparent. Children that are never born because their parents can’t afford them are the ultimate failure of such a system.
In the next post, I’ll discuss some potential improvements to current policy.
Header image is from the wonderful Dogger by Shirley Hughes