SOCIAL MARKET FOUNDATION
where her child is aged one and two could face a pay penalty of up to £1,500 per year for the report of her career compared to a colleague returning to work after maternity leave. Furthermore, stronger attachment to the labour market improves pension eligibility, enhancing the standard of living in older age. Maternal employment has increased substantially in the last half-century at about 11% per decade.42 In 2008, just over 60% of married women with children under the age of five and just over 35% of lone parents with children under the age of five were in employment; up from roughly 55% and 25% respectively in 1996.43 The greater availability of formal childcare has been one reason among many for why maternal employment has risen.44 The size of the effect on maternal employment of subsidising formal childcare is debated. US evidence suggests it is rather modest, although it is higher for low-income and less-skilled mothers.45 As a consequence, formal childcare helps reduce government expenditure in the short-term (through more benefit claimants becoming taxpayers) and in the long-term (through citizens who have acquired higher human capital, increasing their productivity and reducing their risk of future labour market exclusion). Further, high-quality formal childcare brings private and public benefits through reduced child poverty and greater gender equity.
Childcare’s contribution to reducing child poverty It is rare for a child to be living in poverty if two parents are working.
42
Stephen A.Hunt (ed.), Family trends: British families since the 1950s (London: Family and Parenting Institute, 2009), 46.
43 44
Hunt (ed.), Family trends, 51. Arnaud Chevalier and Tarja K. Viitanen, “The causality between female labour force participation and the availability of childcare”, Applied economics letters¸9:14 (2002), 915-918.
45
Patricia Anderson and Philip B. Levine, “Child care and mothers’ employment decisions”, in David E.Card and Rebecca M.Blank (eds.), Finding jobs: work and welfare reform (New York: Russell Sage Foundation, 2000), 420-462.
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