High childcare costs mean 'not worthwhile' for mothers to return to work

Rising childcare costs mean that it is not economically viable for mothers to work full-time, as they strive to find the right balance between work and family.

The report by the Organisation for Economic Co-operation and Development said that mothers are unable to work more due to high childcare costs, availability and access to childcare settings, and taxes.

‘Childcare costs and time constraints often make part-time an attractive option for mothers wishing to reconcile work and family commitments. Many mothers work part-time on a long-term basis,’ the report said.

Improvement to girls’ education in the past couple of decades could be seen as wasted, as high nursery fees mean it is not worthwhile for women to go back to work.

The report, which examined 30 countries’ record for gender equality, including the UK, Brazil, Japan, Australia and the US, urged the Coalition Government to take measures to offer cheaper childcare to parents. ‘Governments should… make childcare more affordable, in order to help women contribute more to economic growth and a fairer society,’ said OECD secretary general Angel Gurría.   

In the UK, after accounting for childcare, 68 per cent of a typical family’s second wage is ‘effectively taxed away’. This is higher than the OECD average of 52 per cent.

Hourly childcare costs in Britain went up this year by 5.8 per cent for a child aged under two and 3.9 per cent for a child aged two and over, according to Daycare Trust figures. These above-inflation increases mean that the average childcare costs now exceed £100 for a part-time place (25 hours) in many parts of Britain, with the average yearly expenditure for a child under two standing at £5,103.

The ‘Closing the Gender Gap: Act Now’ report, said, ‘If good quality, affordable childcare is unavailable, parents, especially those on low-incomes, might not be able to work full-time and take care of their families.’

The report also revealed that the average pay gap between men and women is 22 per cent in families with one or more children. For couples without children, the gap is 7 per cent. The gap could be bridged, the report added, by improving the tax and benefit system for working parents.   

The report warned that, ‘Cuts in public sector employment, where women account for just under 60 per cent of the total workforce, will worsen women’s position in the labour market in coming years.’ Official figures show there are 5.8 million women working part-time in Britain, compared to 7.7 million women working full-time.

The study also found that more women are in paid work during child-bearing years (between the ages of 25 and 34) today than in the past. In 1960, around 30 per cent of 30-year-old mothers were employed, compared to more than 60 per cent in 2010.

Anand Shukla, chief executive of Daycare Trust, said, ‘Our childcare costs are among the highest in the OECD which means that some families are no better off when the mother returns to work after maternity leave.

‘Ministers say that work should always pay and they are changing the benefits system to make this happen. But the childcare system also needs major reform as the cost of childcare is forcing parents to turn down jobs or end up in hardship, with our research showing some parents getting into debt and cutting back on food just to pay their nursery bill.’

A Department for Education spokesperson said, ‘Rising childcare costs are a critical issue for parents. Too many parents do not feel it is worth going back to work because the costs of childcare are too high. This report shows that helping more parents back to work could provide a real boost to the economy.

‘The Prime Minister launched the childcare commission in June to look at how we can improve the availability and affordability of childcare and reduce burdens on childcare providers.

‘We are listening very closely to the views of front-line professionals, parents and others on these issues. We are also looking at practice in other countries including France, Germany, the Netherlands and Denmark. We will be setting out next steps in due course.’