Should childcare be made free to tackle the labour shortages?

Honor & Scarlett

In England currently, the government provides 30 hours of free childcare weekly for 3 to 4 year olds, although this is being proved inefficient for workers as they cannot work to their full potential with such restricted hours and the lack of affordability of extra childcare. This creates an evident disincentive for around 1.7 million mothers to join the workforce as it can be deemed cheaper to stay at home. If childcare has increased accessibility, it can encourage more people of age to work to join the workforce. This would increase the supply to the labour market, helping to increase current productivity levels.

Furthermore, it could potentially increase the development of children prior to starting primary schools as nurseries allow an introduction to basic numeracy and phonics, known to boost future cognitive and social development. Thus, an investment now could have potentially long-term effects on the skill of the workforce. Therefore, it allows an advantage for the lower socioeconomic groups that can’t afford childcare earlier on as their children have the same opportunities. This then leads to a long term government macroeconomic objective which is the reduction in the distribution of income between the rich and the poor. If the government were to fund free childcare, then the investment required would result in large opportunity costs. For example, the investment would be funded by increased taxes or cuts to other government programmes. Especially, due to the current economic climate free childcare would be particularly hard to fund. Additionally, free childcare could lead to a reduction in the quality of care compared to paid child care. For example, compromises would have to be made in areas such as catering and staff quality. As a result, this would have negative effects on child development and wellbeing. For instance, due to lower quality catering there could be increased health problems which effect children’s development. Finally, there are arguments to suggest that the government should not be involved in the provision of early education and care, as it is better left to the private sector. Firstly, as it would lead to an inefficient allocation of resources and the money spent towards childcare might be better spent somewhere else. For example, towards healthcare to improve the efficiency of the NHS and the welfare of the country. Also, the government could crowd out private providers, reducing the number of childcare providers and making it difficult for parents to access private childcare services if they wish to.