IFS Mothers’ labour market participation and use of childcare in the UK Mike Brewer Institute for Fiscal Studies

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


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.


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.


...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.


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.


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


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


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


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.


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


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.


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




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




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.


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.


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.


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.


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


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

Documents

IFS Mothers’ labour market participation and use of childcare in the UK Mike Brewer Institute for Fiscal Studies