Mothers want to work: The (growing) case for universal childcare

The Productivity Commission released its draft report on universal early childhood education and care (ECEC). The report found that broadening the supply of affordable, quality childcare services will be crucial in boosting female labour participation.

Getting the right kind of education and care early on is invaluable for children and parents alike. For children, these services afford opportunities to form relationships, play, learn, and develop lifelong skills. For their parents, affordable access to quality ECEC services is one of the most powerful initiatives for increasing workforce participation, said the commission.

Despite this, access to ECEC services in Australia is low and getting lower as the fees significantly outpace inflation and wages. To combat this, the commission is calling for universal ECEC.

Prohibitively expensive

It’s a concerning fact that children experiencing disadvantage and vulnerability are both least likely to attend ECEC services while also standing to gain the most from those services.

Many families find cost a barrier to accessing ECEC services. For the typical double-income family in Australia, net out-of-pocket ECEC expenses average around 17 per cent of their income. This is substantially higher than the 11 per cent average across other OECD countries. Moreover, the average fees charged by childcare providers increased by around 20 per cent between September 2018 and December 2022.

While it’s important to note that childcare subsidies and increases in the number of ECEC providers have somewhat alleviated the out-of-pocket expenses for low-income families, the Productivity Commission reported that these subsidies often failed to target families who are most in need.

“There are many reasons why children who stand to benefit significantly from ECEC attendance are missing out,” said the Productivity Commission. “There may be insufficient services in their local area; where services exist, they may have substantial waiting lists or limited placed due to workforce constraints, or out-of-pocket fees may be unaffordable; services may not be inclusive or culturally safe for children to attend.”

As noted by the Productivity Commission, Aboriginal and Torres Strait Islander children are more likely than their peers to miss out on ECEC. This can perpetuate existing patterns of disadvantage both in childhood education and parental work opportunities.

Mothers want to work

In 2020–2021, four per cent of fathers were looking for a job or more hours, while nearly 20 per cent of mothers said the same. Approximately 15 per cent of these parents listed “ECEC-related issues” as their main barrier to work. Though affordability of ECEC services was listed as the main issue in accessibility, close behind was a general lack of availability of such services and their inflexibility.

The Productivity Commission pointed to an increase in workforce participation rates among mothers of 10 per cent between 2009 and 2021 as being “mostly” the result of mothers getting help in caring for younger children. Assuming all parents would choose to work were it not for ECEC-related barriers, the Productivity Commission estimated an additional 118,000 workers would be added to the national workforce.

“Cost and availability continue to be barriers to accessing ECEC, and for parents and carers achieving their preferred level of workforce participation …

“The government believes more accessible ECEC is one of the most powerful initiatives it can pursue for increasing workforce participation, particularly for women,” said the Productivity Commission.

“ECEC enables mothers, in particular, to maintain a connection to the labour force when children are very young and allows for increasing hours of work as children grow … This has positive effects on their lifetime earnings and enables them to use and continue to develop their skills (which can offer benefits to the broader community as well as individuals).”

Towards universal ECEC

The Productivity Commission defined universal ECEC as “making quality services accessible to all children and families”. It also said that getting there will take broader availability, affordability, and a reduction in inclusion gaps.

“A key question for this inquiry is how to increase availability in places where the market-based model has resulted in undersupply – and also consider what level of availability is sufficient to constitute ‘universal access’ and support net community benefits,” said the commission.

“This is a complex question, given that there is no clear answer in the academic research as to the intensity of attendance that can maximise the benefits of ECEC for children.”

Nonetheless, the commission recommended that up to 30 hours or three days a week of quality ECEC should be available to children up to five years of age.

Importantly, the commission distinguished between universality and uniformity. ECEC is a family matter and comes down to the unique needs and desires of parents and children. Therefore, universal ECEC really means broad accessibility.

“Ensuring that all children aged 0–5 years have access to some form of affordable ECEC for three days a week (up to 30 hours) strikes a balance between the preferences of families and the incentives they face, and the benefits for children from ECEC participation,” said the commission.

The expanded supply of ECEC services, said the commission, will have to be underwritten by public and private stakeholders.

“Governments can affect the supply of ECEC in different ways, either by changing the incentives faced by providers, to encourage them to set up new services, or by intervening more directly in the market,” it said.

“Policy changes that relax the activity test and improve affordability for lower-income families will likely see more providers setting up services, particularly in disadvantaged areas, as families seek to increase their participation in ECEC.”