ifs mothers’ labour market participation and use of childcare in the uk mike brewer institute for...
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IFS
Mothers’ labour market participation and use of childcare in the UK
Mike Brewer
Institute for Fiscal Studies
© Institute for Fiscal Studies, 2007
Outline
• Mothers’ labour market participationBased on Brewer and Paull (2006), DWP RR 308.
• Trends in childcare use in the UKBased on Brewer and Shaw (2004), DWP WP 16.
• Government policy and childcare
© Institute for Fiscal Studies, 2007
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.
© Institute for Fiscal Studies, 2007
Women with young children are less likely to work than those with older children...
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Age of youngest child
% in
wo
rk
Lone mothers
Mothers in couples
Source: Derived from FRS 2005/6. Sample: women with children under 14.
© Institute for Fiscal Studies, 2007
...because having children has a dramatic impact on women’s labour market behaviour.
0
10
20
30
40
50
60
70
80
90
100
-8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
Years since (before) first child
% in
wo
rk
Men Women
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.
© Institute for Fiscal Studies, 2007
Most women go back to work eventually, but not necessarily permanently.
0
10
20
30
40
50
60
70
80
90
100
1 2 3 4 5 6 7 8 9 10
Years since birth of child
%
No return to workthen new baby
Temporary return towork then new baby
No return to work
Temporary return towork
Permanent return towork
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.
© Institute for Fiscal Studies, 2007
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
© Institute for Fiscal Studies, 2007
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
© Institute for Fiscal Studies, 2007
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
© Institute for Fiscal Studies, 2007
Trends in mothers’ labour market participation
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
80%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% o
f m
oth
ers
in p
aid
em
plo
ym
en
t
Lone parents, FRS Lone parents, LFS
Couples, FRS Couples, LFS
Source: Own calculations from FRS and LFS, various years. Sample is all families with children under 14.
© Institute for Fiscal Studies, 2007
Trends in childcare use amongst working families
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% o
f fa
mili
es
us
ing
ch
ildc
are
Lone parents, FRS Lone parents, LFS
Couples, FRS Couples, LFS
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.
© Institute for Fiscal Studies, 2007
Trends in formal childcare use amongst working families
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% o
f fa
mili
es
us
ing
fo
rma
l ch
ildc
are Lone parents, FRS Lone parents, LFS
Couples, FRS Couples, LFS
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.
© Institute for Fiscal Studies, 2007
Trends in informal childcare use amongst working families
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% o
f fa
mili
es
us
ing
info
rma
l ch
ildc
are Lone parents, FRS Lone parents, LFS
Couples, FRS Couples, LFS
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.
© Institute for Fiscal Studies, 2007
Trends in formal childcare (including EYE) use amongst under 5s in working families
0%
10%
20%
30%
40%
50%
60%
70%
80%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% o
f u
nd
er
5s
in w
ork
ing
fa
mili
es
in f
orm
al
ch
ildc
are
Under 3s, FRS Under 3s, LFS
3-4s, FRS 3-4s, LFS
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.
© Institute for Fiscal Studies, 2007
Trends in formal childcare use amongst school-age children in working families
0%
5%
10%
15%
20%
25%
30%
35%
40%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
% o
f c
hild
ren
in w
ork
ing
fa
mili
es
in f
orm
al c
hild
ca
re
5-6, FRS 5-6, LFS
7 and over, FRS 7 and over, LFS
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.
© Institute for Fiscal Studies, 2007
Do parents pay for childcare?
0%
5%
10%
15%
20%
25%
30%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
% o
f w
ork
ing
fa
mili
es
pa
yin
g f
or
ch
ildc
are
£0
£5
£10
£15
£20
£25
£30
Me
an
am
ou
nt
sp
en
t, £
/wk
(i
nc
lud
ing
ze
roe
s)
Lone parents, % who pay Couples, % who pay
Lone parents, £/wk Couples, £/wk
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.
© Institute for Fiscal Studies, 2007
What do parents pay for childcare?
£0.00 £0.50 £1.00 £1.50 £2.00 £2.50 £3.00 £3.50 £4.00 £4.50 £5.00
Centre-based
Out-of-school or holidayclub
Childminder
Nanny/au pair
Close relative
Other relative/friend
Price per hour per child
FACS, 2001
PDFC, 2001
Childcare & EY survey2004
FRS 2005/6
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.
© Institute for Fiscal Studies, 2007
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
© Institute for Fiscal Studies, 2007
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?
IFS
End