Government bases decision to extend free childcare on ISER research

The Government’s announcement in the Spring Budget to extend free childcare to 30 hours for children aged 9 months has been based on ISER’s research, cited as the key source in the published report by the Office of Budget Responsibility.

“We expect the new 30 hours a week of free childcare for working parents of nine-month- to two-year-olds to gradually increase labour market participation of parents with young children. By 2027-28, we expect around 60,000 to enter employment and work an average of around 16 hours a week (in line with the average for part-time workers). An equivalent effect on total hours comes from the 1½ million mothers of very young children already in work increasing the hours they work by a much smaller amount. This policy has by far the largest impact on potential output in this Budget.

The research, Does More Free Childcare Help Parents Work More co-authored by Professor Birigtta Rabe and former MiSoC Director now Chief Economist at the Resolution Foundation, Mike Brewer, with Sarah Cattan from the Institute of Fiscal Studies and Claire Crawford from the University College London, found that:

“The offer of free childcare may not start early enough following their child’s birth to prevent mothers from leaving their jobs and detaching from the labour force. It may also be the case that the offer may not be sufficiently generous or sufficiently flexible to enable parents to work. Finally, because any part-time arrangement is due to be temporary (until the start of school), mothers may not be willing to rethink their participation decisions while the current childcare arrangement is only in place for a few terms.

In considering whether to extend childcare subsidies, there are obviously trade-offs in terms of how the government should spend its limited resources. Offering more hours per week or more weeks per year for all children would either increase the total cost of the policy or necessitate a reduction in funding per child, potentially compromising the quality of provision that could be accessed, with consequences for child development.”

Read the research, published in Labour Economics here

Read our Written Evidence to the Education Committee Inquiry into Support for Childcare and Early Years, summarising our recent findings on childcare provision and the impact of increasing funding here

Read the Government’s Office of Budget Responsibility’s Report outlining the impact of the policies introduced in the Spring Budget of 15 March 2023  – Economic and Fiscal Outlook March 2023


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