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Lower-income families spending 20% of their disposable incomes on childcare

A new study from the ESRI has looked at how the cost of childcare affects working mothers.

Image: Shutterstock/Oksana Shufrych

THE AVERAGE COST of having one child in a creche is €4.82 per hour, and the average family spends 12% of its disposable income on childcare, a new report from the Economic and Social Research Institute (ESRI) has said.

The report – which looks at mothers in employment – used data from over 9,000 families who participated in the Growing Up in Ireland study and found that around half of parents who use childcare do so for at least eight hours a week, with 24 hours the average number for a three-year-old.

A majority (54%) of parents put their child in a creche, while 23% used a childminder and the other 23% had their child cared for by a relative. 

Of the ones taken care of by relatives, 55% didn’t pay that family member to take care of their child.

The costs of childcare were highest in Dublin and east Leinster, with the financial burden highest on low-income families and lone parents.

This cost goes up for families with more than one child in childcare.

The ESRI’s study looked at mothers in employment and found it was more complex than a simple choice between working full time or staying at home.

When their child was five years old, women were more likely to work full time, or close to full time hours, than they were when their child was nine months old.

There was also considerable change in mothers’ employment status when their child was between the ages of three and five.

While 9% entered employment, another 7% left employment, with almost half (45%) seeing their hours change between these two periods.

Speaking to reporters yesterday, study co-author Helen Russell said that there was a “significant negative effect” on the hours a mother works as the cost of childcare increases.

The researchers estimated that if the cost of childcare rose by 10%, for example, then a woman was likely to work at least half an hour less a week to offset the increase in cost.

As lower income families spent a greater proportion of their incomes on childcare, this was a “stronger barrier” for them, the researchers said, which may lead to mothers leaving the workplace due to the high cost.

This research does not factor in the eligibility for the free pre-school year introduced by the government, or the affordable childcare scheme as it is too early to assess its impact.

Nevertheless, the researchers say that this study shows the need for extra policy supports to be put in place for families to help pay for childcare.

“Childcare costs are a greater barrier to employment for households with lower incomes, indicating that targeted supports are required for low-income families,” they said.

Policies to address childcare costs are also important from a poverty perspective, as exclusion from the labour market due to childcare costs is associated with poverty risks and household joblessness. Additionally, increased female employment contributes to the sustainability of the welfare state through increased tax receipts.

In a statement, Children’s Minister Katherine Zappone said that “more must be done” to support families. 

“In addition to measures which I hope to secure in Budget 2019, my officials have also been putting in place the legal, administrative and IT infrastructure so that the new Affordable Childcare Scheme will become a reality in the coming year and benefit children, parents and providers for generations to come,” she said.

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Sean Murray

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