Jun 19, 2005

Childcare costs in Ireland

Irish Outlook: Damien Kiberd: Bring childcare within reach - Sunday Times - Times Online

The above article gives several options that the government might choose to increase help with childcare in Ireland.

Extract below
"THE structural make-up of Irish employment is changing, with the number of women in paid employment increasing rapidly. Last year saw another 40,000 women join the workforce, bringing the number employed to 840,700. This is a process that is likely to accelerate.
A recent study by the Central Statistics Office (CSO) pointed out that there was a comparatively low participation rate among older Irish women in the workforce. This will lead to an inexorable rise in the average participation rate as the older age groups are progressively replaced by younger age groups in the paid labour force.

The upshot? Female participation rates in the workforce, currently tipping 51%, seem likely to move towards 60% at some point in the next decade. With that trend under way there is set to be a new focus, inevitably, on the issue of childcare.

According to senator Mary White, one of the few parliamentarians to take the issue of childcare costs seriously in recent years, what is now a chronic shortage of professional childcare facilities is threatening to become a crisis. She says that the number of children in the under-four age category is set to increase from 290,000 in 2004 to 325,000 in 2016. These figures are based on CSO forecasts from last year. As we know from experience, these numbers may underestimate the scale of demographic expansion. Furthermore, studies show high numbers of females in the 18-24 age category, the very people who will be starting families in the coming period.

Following defeats in by-elections in Kildare North and Meath, where the cost of childcare was a big issue on the doorsteps, the government has begun to devise strategies to deal with the subject. It is coming under pressure from employer bodies such as Ibec, which is finding it difficult to locate labour in a market that has an average unemployment rate of 4.1% (even lower in Greater Dublin) and which last year increased paid employment by 3.9%. Obviously, increased migration is part of the solution, but driving the female participation rate closer to the EU’s Lisbon agenda target of 60% is a top priority.

The problem for planners is that the childcare issue operates in different ways in different segments of the labour market. Average pay for women is still much lower than for men. This means that at the lower end of the job market the idea of a female worker paying for professional childcare from modest wages is a non-starter.

What childcare is available is provided informally by relatives who are prepared to assist for a few hours a day. This helps explain why some 17,600 of the 40,000 women who entered employment last year took up part-time jobs. Many women want part-time work to supplement the family income. They want that work to be close to their homes to avoid long commuting times, which simply exacerbate the childcare problem. And they would prefer the hours of work to be flexible.

According to White, who will publish a major document on childcare costs in coming weeks, professional childcare costs are simply out of range for many family units. She says that a family with two children in some districts could be paying €1,400 per month for childcare, which is the equivalent of servicing a €280,000 mortgage. In the middle of the market, many families have opted to shoulder burdens of this magnitude despite the absence of any form of state assistance towards creche costs or tax reliefs on receipted expenditure at creches. This is putting pressure on family budgets and probably deterring many mothers from entering paid employment for long periods"

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