Today (7 August) Tom Molloy wrote in the Irish Independent “Our child benefit might be relatively high, but the cost of raising children is staggering”. In it Tom Molloy says Ireland is a country with high childcare costs, citing the OECD and adds:
High childcare costs are not some random act of God or set at will by creches. They are the direct result of Government policies which have been implemented by all the major parties over the past few decades.
Are Irish childcare costs really much higher than other countries?
In parallel with Tom Molloy’s piece, the Irish Independant also published the results of a survey, commissioned by them, into the costs of childcare (“Childcare costing more than mortgage bills, survey finds”). In that survey, childcare for one child was found to cost “up to €1,100 a month to have just one child minded”, and for “families with two or more children, the bill for fulltime care can easily top €2,000, whether you use a creche or a childminder”. Also mentioned is an OECD report from 2010, which they say suggests between 20% and 41% of family income is being paid out for child care.
This report is Gender Brief (March 2010), which looks at family structures, women’s employment and income and public policy towards children. More detail is also available here. The report finds that, for a dual earner family earning 167% of the average wage, Ireland has the highest child care costs, once childcare benefits, rebates, tax benefits and other benefits are taken into account. The cost comes to 45% of the average wage (p. 21). If reckoned as a percentage of net family income, Ireland is third highest (29%), after the UK and Switzerland.
A subsequent OECD report, Doing Better for Families, also noted the effects of high childcare costs. A report by the Guardian (UK are third in terms of payouts for children, but outcomes are poorer ) commenting on the UK results said,
“A second [UK] earner, once childcare costs are taken into account, takes home only 32 pence in a pound, compared to 48% on average across OECD countries. The only countries where the childcare costs reduced earning further were Ireland, New Zealand and Switzerland.”
In terms of raw cost, the last CSO Quarterly National Household Survey focusing on Childcare (Q4 2007) found that the average weekly expenditure on any type of paid childcare was €123.20 (highest costs were in Dublin where 30 hours creche childcare cost averaged €198 a week). Average costs for school aged children were lower at €72.40 per week. In 2011, the National Consumer Agency Childcare Price Survey found the cost of creche childcare for a 6 month baby ranged from €155 to €233 a week. So a top figure of €1,100 today, as found by the Irish Independent, would not be surprising.
As the Independent noted, crèches have set standards to meet to ensure good quality care. Much of the cost is related to staff costs. There is some suggestion that creches have little scope to reduce prices. Loosening regulation in an attempt to lower prices would be knock-on effects: as the OECD notes:
Some evidence suggests that low-quality care, long hours in care, and enrolment before age one is associated with behavioural problems in children. By contrast, high-quality formal childcare is linked with cognitive and developmental gains, particularly for children from more disadvantaged home environments.
In 2007, Ireland had one of the lowest public expenditures on childcare and early education provision – 0.4% of GDP (OECD Family Facts). In discussing family policy in an “era of fiscal consolidation”, the OECD says, “Countries that do well on family outcomes devote about half of public spending on family benefits to in-kind services, including quality early childhood care and education services, so it makes sense to sustain this investment.” They also point out that “A coherent policy approach for the early years would ensure that childcare services are available when leave benefits run out and that there is little difference in investments for children attending preschools or compulsory education.” Ireland fails to achieve either; successive governments have chosen to focus nearly all public spending for families on cash benefits rather than services and have invested little in early childhood.
So in summary, Ireland is in the top three for childcare costs in the OECD countries studied. Childcare costs have a substantial impact on family incomes. In addition, not only would a network of crèches Tom Molloy speaks of be less amenable to cuts now, they would probably have given better outcomes for the public money spent.
- OECD, Gender Brief (2010)
- OECD, Doing Better for Families (2011)
- (A selection of the data from the above OECD reports is also available from The Guardian, including an interactive chart)
- CSO, Quarterly National Household Survey: Childcare (2007)
- National Consumer Agency, Childcare Price Survey (2011)
- Public Service Information: Regulation of pre-school childcare services in Ireland
- Ursula Barry, The provision of out-of-school care in Ireland UCD School of Social Justice Working Papers; 11(2) (2011)
- StartStrong. Children 2020 (2010)
- Office for Social Inclusion: A Social portrait of Children in Ireland (2007)
- National Women’s Council of Ireland, An Accessible Childcare Model (2005)
- Margret Fine-Davis, Childcare in Ireland Today Briefing Paper to the Irish Congress of Trade Unions (2007)