Childcare services as a social infrastructure for supporting parents’ employment

Author:European Union Publications Office
Pages:105-114
SUMMARY

4.1. Availability. 4.2. Costs of services. 4.3. Incompatibility between services and working hours. 4.4. Quality of care.

 
INDEX
CONTENT

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The following discussion examines the childcare services available across the pre-2004 Member States, the new Member States and the non-EU neighbouring countries. While we recognise that the starting points for provision differ across countries it is still possible to identify services which support parents’ employment, as well as aspects of provision that may create barriers, particularly to maternal employment.

It has been emphasised throughout the discussion so far that these services cannot be examined in isolation. Good available childcare may not be sufficient alone to serve as an incentive for re-integration as how these services interact depends upon leave entitlements, tax and benefit policies as well as the employment on offer for women. For example, lower labour market wages of women lead to lower incentives for women to engage in paid employment. Without jobs of good quality, childcare alone cannot provide the impetus for high maternal employment rates. However, in discussions of the leave entitlements across the countries it became apparent that good quality, affordable childcare services can act as a key re-integration mechanism, providing parents with the ability to reconcile both work and family, and promote women’s employment continuity which will impact employment prospects across the whole lifecourse as well as in the intensive child-rearing period.

There are four aspects of childcare provision that determine whether it supports or acts as barrier to parents’ employment. These are availability of services, the cost of services and any financial support provided, the compatibility of facilities with hours of paid work, and the quality of provision of offer. These will be considered in turn (a summary of the issues for each country can be found in Table 4.1.).

4.1. Availability

In general, the availability of childcare services was found to be at a good level in five countries on the measure that supply meets demand. These countries are Denmark, Finland, the Netherlands, Sweden and Slovenia. Slovenia is the only new Member State to report a good level of availability rooted in a long history of publicly organised and affordable childcare available, where the cost to parents was income-related. It must also be pointed out that childcare services in East Germany in comparison to West Germany are also well-developed. Despite a decrease in the number of childcare places by 50% since 1990 due to a dramatic decrease in birth-rates after unification, there is still provision for 37% of all under threes (already meeting the Barcelona target of 33%), and the places for kindergarten children are 105% of the number of children (Maier, 2004).

More generally, there is a consensus that universal improvements in care provisions have been achieved in the pre-2004 EU States, although there are still major shortfalls in availability and affordability (Rubery, 2002). Some countries have developed specific policy programmes to improve childcare services. For example, in the UK a ‘National Childcare Strategy’ was introduced in 1997 with the stated objective of ensuring that ‘affordable, accessible and quality’ childcare is available to all parents, thus helping to raise mothers’ employment rates. However, this picture of progress is misleading when examining services across some of the new Member States and non-EU states. In Poland, Bulgaria and Slovakia there has been a decline in available childcare services. In all of these countries, there was once a tradition of both state and employer provision that was free of charge but this has now been dismantled. In Poland for example, the state devolved responsibility to local authorities and employers closed down their childcare centres. Under new arrangements,Page 106 nurseries (for children up to 3 years) and kindergartens (for children aged 3-6) can be both public and private. The non-public institutions were eligible to receive payments from the local government of up to 50% of the per child costs of public institutions. However, local governments began to face problems with maintaining the public institutions and supporting non-public ones. It resulted in a decrease in public expenditures on childcare services and rising operating costs of these institutions.

It is the distinction between available childcare for the under threes and the over threes that remains a key problem in the majority of countries, regardless of their different starting points. The poor level of provision for under threes is identified in all 25 countries where availability was insufficient. Indeed, it is often the case that availability of services for children aged three to six (or the age of compulsory schooling) can cater for the majority, if not all, of this age group in stark contrast to the provision for the under threes. For example, in West Germany in 2002, places were available for only 3% of the under threes compared to 88% of the 3 to 6-7 years olds; in Greece; 3% of children under 3 years compared to 46% of 3 to 6-year-olds; and in Spain and Luxembourg, less than 10% of children aged 0-3 are provided with institutional childcare. In the new Member States (apart from Slovenia) limited provision for this age group is also a key problem but there is limited data on coverage of this age group.

Availability for this age group also varies across municipalities and regions. In Italy the percentage of under threes in childcare is only 6%, while it is 95% for children between 3 and 6 years (mandatory school age). However, public childcare services cover about 30% of under threes in some areas of the North, but only 1-2% in some Southern areas (Eurispes 2003). In Lithuania availability for this age group varies in relation to rural and urban areas. In 2001 58% of pre-school age children in urban areas and 11.8% in rural areas were attending nurseries or kindergartens. In the age group of children under three these indicators were respectively 19.9% and 3.2%. There is also evidence of a decline in provision for this age group in Poland. The number of places per 100 children up to 3 years of age dropped from 10.4% in 1990 to 4.5% in 2001.

This would appear to be a striking similarity across the majority of countries. However, it is also important to highlight the different starting points of countries. In Belgium and Iceland provision for under threes is highlighted as a key problem of availability. Yet these countries are much closer to meeting the Barcelona target than the countries discussed above. For example, in Iceland, in 2002, childcare provision covered 93% of children between 3 years old and the mandatory school age and is contrasted with the much poorer provision of 49.2% of one-year-old children and 83.9% of those aged 2 years (Nordic Council of Ministers 2003:10). However, this is far higher than in most other countries. In Belgium coverage for this age group is 30% and childcare arrangements are due to be advanced given the 2002 Barcelona target of a 33% coverage rate for under 3-year-olds. The coverage rate for 1 and 2-year-olds is 28 and 48% respectively, but again, the demand is greater than this supply so shortages remain despite relatively high rates of coverage.

There are two interesting patterns to emerge. Firstly, there is no relationship between leave arrangements and the provision for under threes. This does not vary according to the length and availability of parental leave. Secondly, the provision for this group is often supplied by the private sector. This is in contrast to the provision for children aged 3 and over where this is generally publicly financed and free of charge. This has key implications for the costs of these services and who can afford to use them. In Italy, for example, a major problem concerns the costs of public childcare before and after 3 years of age. While the former is quite expensive, the latter is highly subsidised but in some regions is still more expensive compared to the private sector alternatives. Similarly, in Iceland public childcare is in most cases only available to children two years and older. Therefore, many parents need to use private childcare for children under the age of 3. The relatively high cost of private childcare is a key problem, particularly impacting those parents on low-income aiming to return to employment. The problems of cost will now be considered in more detail.

4.2. Costs of services

The cost of childcare is identified as a key problem across all countries, with some exceptions. For example, in Sweden a ceiling on the childcare feePage 107 was introduced in 2002, which meant the fee was substantially reduced for most families and had a positive effect on female labour supply. Childcare in Denmark and Slovenia is also not expensive and free for parents on low incomes. However, in general affordable childcare is difficult to access. This is particularly the case when parents have to rely on private provision but can also be the case when places are subsidised. In the majority of countries there is some level of financial support provided by the state for the costs of childcare, often dependent upon income. Malta and the Czech Republic are the only countries where no subsidies are reported in the national reports. However in Ireland the only subsidies for childcare available are to those participating in certain labour market and training schemes under which childcare allowances are paid. Public funding under the Equal Opportunities Childcare Programme does support childcare services in geographically designated areas of disadvantage and therefore indirectly subsidises childcare costs in these areas (Barry et al., 2004). There are also examples from a number of countries of allowances for childcare costs which are targeted at the low-paid in order to ‘make work pay’ (Box 4.1) as well as income-related tax relief which all parents are eligible to apply for (Box 4.2). However, in most cases the structure of relief and allowances is designed to offset only part of the childcare costs, and therefore parents are still faced with costly childcare services which create financial disincentives. This problem particularly hits low-income families. In Belgium, for example, while nursery schools are free of charge and public childcare services for under threes are subsidised, when all direct and indirect subsidies are taken into account low-income families spend a higher proportion of the household budget on childcare costs than higher income families. In general, where provision is left to the private sector childcare services do not support parents’ employment, particularly those in low-income families (Meulders and O’Dorchai, 2004). In Ireland only 4% of pre-school children are in publicly supported childcare. The majority of parents are reliant on informal provision or private-sector provision. The cost of childcare is a major obstacle for low-paid workers wishing to engage either in full-time or part-time employment. For example, a woman with one child in childcare costing on average 5.47 euro per hour and on the minimum wage of 6.35 euro (at the end of 2002) would take home 0.88 euro for every hour that she worked (Barry et al., 2004).

The way that childcare costs can reduce the financial returns from employment can become particularly acute for lone parents and create severe unemployment or inactivity traps (Box 4.3). At the same time, additional financial support targeted at lone parents in recognition of the greater costs and labour market difficulties that such families face are often an important means of reducing their risk of poverty. Here it is important to note that the extent and form of additional support for lone parents is uneven across the new Member States. For example there is no specific form of benefit to help lone parents in Latvia (Trapenciere, 2004), the means-tested benefit available in Cyprus and Malta is very low (Panayiotou, 2004; Borg, 2004) and Estonia is an example of a system where lone parents receive a specific tax credit to help meet housing mortgage costs, but only while on parental leave (Laas, 2004).

Box 4.1. Examples of allowances for childcare costs targeted at ‘making work pay’ for the low-paid

In Austria a childcare allowance (Kinderbetreuungsbeihilfe) to cover part of childcare costs is paid by the Public Employment Service to encourage low-income parents of children under the age of 15 to enter employment/participate in training programmes.

In the UK some assistance with childcare costs is available to job-seekers participating on the ‘New Deal’ active labour market programmes and to low-paid workers via the new childcare tax credit.

In France the recently introduced childcare allowance (PAJE) provides 160 euro/month for low-income households with a child aged up to 3 years – and a supplement for childcare for working parents. The threshold has been extended to include more low-income earners (up to 3.5 and 4.5 times the SMIC, previously the limit was 3 times the SMIC), plus a supplement aimed at the poorest families.

Sources: Fagan et al. (2004), Mairhuber (2004), Silvera (2004)

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Box 4.2. Examples of tax relief for childcare costs for all parents

In Belgium parents may be entitled to a childcare tax allowance paid until the child’s 4th birthday and up to a maximum threshold (2 464 euro/year or 11.2 euro/day) if they use a recognised form of formal childcare. This allowance is made to parents with either earnings or replacement income. It is divided between parents according to their contribution to household’s earnings, which usually means women receive a smaller share regardless of their contribution to the payment of the childcare costs.

In Sweden a ceiling was introduced to the childcare fee in 2002 (MAXTAXA), which reduced the fee substantially for most families. Children aged 4 years and older are offered a part-time (525 hours/year) pre-school place free of charge. Measures such as these which reduce childcare costs have had a positive effect on women’s labour supply.

In Norway documented childcare expenses for children 11 or younger are deductible from taxable income up to a threshold (One child NOK 25 000, two or more children NOK 30 000). From 2004 the tax on employer-paid childcare services is removed.

In Finland childcare subsidies were extended in 1997 to be paid for care outside of municipal day care services. On average this covers 30% of costs (the average allowance in 2002 was 127.60 euro/month against the average cost for private day care of 411 euro/month.

In Lichtenstein working parents can seek financial support, indexed to income, for childcare expenses.

Sources: Ellingsæter (2004), Lehto (2004), Löftström (2004), Meulders and Dorchai (2004), Papouschek (2004)

Box 4.3. Specific tax credits/cash benefits for lone parents which create unemployment or inactivity traps for lone parents

The interaction of childcare costs with the tax/benefit system can create particularly acute unemployment or inactivity traps for lone parents, which is illustrated by two examples from France and Ireland:

In France, the API (single parent’s allowance) does not encourage the search for employment by single parents (95% are mothers). Furthermore, the minimum income guarantee (RMI) is linked to family situation and number of children whereby single parents with one child receive considerably less than those with three or more, who already received bigger family benefits. ‘After the creation of RMI, there was a significant drop in the employment rate of single parents with 1 or 2 children compared to that of single parents of bigger families.’ (Piketty, 1998).

In Ireland the One Parent Family Payment (OPFP) allows claimants to retain the right to a reduced payment if they have earnings within a limited income range (146.50 euro to 293 euro/week), after which there is no entitlement, but to ease the transition off the benefit claimants whose earnings rose above the ceiling could receive half of their previous payment for 12 months. However, the coverage of this payment has been limited because the income threshold has not been increased since 1997, and furthermore in the 2004 budget the transitional half-rate payment was abolished. The falling ceiling on the earnings disregard, and the reversal of a policy of gradual withdrawal, means that in practice lone parents seeking employment tend to seek part-time and often low-paid employment (See Boxes 1.15 and 1.16 for more details).

Sources: Silvera (2004), Barry et al. (2004)

Measures targeted at lone parents have been introduced or extended in some of the new Member States, but overall provisions remain limited, and gender mainstreaming of this area of social inclusion policy is underdeveloped (see Fagan and Hebson, 2004).

While there are high costs in a majority of countries (costs are mentioned as a general problem in Belgium, France, Ireland, Italy, Luxembourg, Portugal, Cyprus, the Czech Republic, Iceland, Lichtenstein), there is also a trend towards the rising costs of childcare services. This is highlighted in the UK and in a number of the new Member States including Estonia, Latvia, Poland and Slovakia, as well as in Bulgaria. In Latvia, for example, regardless of subsidies for poor households, the costs of kindergartens are increasing. In 1990 costs amounted to 4% of the average salary and in 2001 this has risen to 10%. It is certainly the case that private provision is more costly than public sector provision in all countries. In the UK, the expansion in childcare services has involved a large growth in private sector day nurseries and parents now pay between 75-93% of the cost of childcare in the UK, with the government paying most of the rest plus a small contri-Page 109bution from employers (Fagan, 2002). The typical cost of a full-time nursery place for a child under two is 134 pound a week, more than 7 000 pound a year; a rise of nearly 5% since 2003, making this form of childcare prohibitive for low and middle-income families. In Luxembourg and Portugal childcare costs are expensive, especially in the non public-funded sector where fees do not take parent’s incomes into account. In Cyprus the typical cost of private day care is around 100 pounds per month per child (state day care is approximately 60 to 70 pounds) with the minimum wage being only three times this much. An exception is in Italy, where although public childcare for children after 3 years of age is highly subsidised, the cost of public childcare services is established by the local authority and therefore the cost can differ quite considerably across the country. In some regions this is more expensive than the private sector alternatives.

It is also the case that the payment of subsidies could serve to disadvantage lower earners in couple households, which are often women. For example, in the Netherlands, parents pay an income-related fee, based on the household income. As a result, a problem can be that the marginal burden on the second income may be quite high and may serve as a disincentive for second earners to return to work, and this problem is not solved by the recent reforms under the new childcare act (see Appendix Table A.3). This has key repercussions for those in low-income families that cannot afford this provision and can lead to inequalities between the use of childcare services as more highly paid parents can use the more expensive private sector options on offer.

Eligibility for subsidies and childcare services can also fail to support maternal employment. In Hungary, the number of places in kindergartens and crèches is limited, and in many cases a child is refused a place because the mother is at home on childcare allowance with a smaller child. This limits women’s opportunity in seeking part-time or full-time employment. In Finland, eligibility criteria also fail to support maternal employment. Eligibility for the private childcare allowance is paid for all children under school age who are not in municipal day care. While this may mean high-earning parents use this for private provision, more often than not parents (usually the mother) claim this benefit and stay at home.

4.3. Incompatibility between services and working hours

A further problem identified by the majority of countries is the incompatibility of the childcare services on offer with the working hours of parents. While opening hours are expanding, even those that provide care over the course of a day ranging from 9 a.m. until 5 p.m. no longer fit the flexibility firms are asking for from working parents. This remains a key problem even in countries where childcare is available and affordable. In Denmark, the opening hours for childcare are generally from 6.30 a.m. to 5 p.m. and yet those working flexible hours, especially in the growing service sector, find the opening hours incompatible with hours of work. In Slovenia the working hours of care centres are usually from 5.30-6.00 a.m. to 4.00-4.30 p.m. In urban centres some care centres are open later (until 5 p.m.) and more parents are demanding longer and more flexible opening hours to suit their working patterns.

There are some signs that opening hours have been extended to cope with the needs of working parents, for example in Greece, but even here the time schedules of nurseries, kindergartens and primary schools continue to be incompatible with employed parents’ working hours. In particular, the opening hours of facilities cannot accommodate the long hours’ culture that is prevalent in many countries, for example in Portugal, Hungary and the UK. There are interesting sectoral differences that need to be taken into account. Often public sector employers provide more family-friendly working hours as well as a working culture that is more conducive to work-life balance. In contrast, long hours working is particularly prevalent in the private sector and therefore parents working in the private sector would appear to be particularly vulnerable to problems of incompatibility. This can be seen in Cyprus where the opening hours of most day care centres cater only for parents working in the governmental or semi-governmental sector (7.30-2.30 p.m.) and are incompatible with the working hours of parents who work longer hours in the private sector.

Some countries have school hours that also conflict with working patterns. For example, in France, there is no school on Wednesdays, and at this time three quarters of 3-6-year-olds are cared for by parents.

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If there are not sufficient canteen places (for lunch), some schools require evidence that both parents are in employment before accepting their children. In Latvia, the short school hours of 8.30-11.00 for 5-6-year-olds children and 8.30-12.00 for 7-10-year-olds children also cause a compatibility problem. The majority of parents (especially low-income families) have no possibilities of after-school care because these facilities charge comparatively high fees.

The key here is that after-school care appears to be underdeveloped and where available appears to be costly. For example, in Belgium after-school care is quite widespread, but there is often a charge and the quality of care can be low. In Portugal, private childcare is found to be more flexible in terms of opening hours but this places those who cannot afford this at a disadvantage.

Some countries are trying to develop facilities that reflect changing working patterns. For example, in Finland the municipalities operate 24-hour day care to provide care for the children of parents who do shift work. In 2001, the proportion of children in municipal evening, night or weekend care was 7% of all the children under school age in municipal day care. However, every third municipality has a shortage of 24-hour care places and two thirds believe that this need will grow in the future as atypical working hours are becoming more widespread (Situation report on children’s day care, January 2001-2002).

4.4. Quality of care

While the focus upon availability and cost often preoccupies debates on childcare services, it is also important to highlight the importance of the quality of the services provided. The quality of care is becoming the focus of public debate in many countries and governments are taking steps to introduce higher standards. In Romania the quality of childcare services is identified as a problem and in Belgium the quality of after-school care is considered to be low (as well as expensive). Quality problems can make parents reluctant to use the care on offer even if it is available.

Quality issues have been a particular focus in the UK, where the National Childcare Strategy has expanded auditing mechanisms for monitoring and raising quality standards (for further details see Fagan, 2002). In countries where quality issues are not a problem, for example in Finland and Sweden, the emphasis is upon the value of caring staff (reflected in pay levels) and the training provided. It is central to look at not only the demand by parents, but also the supply of good quality care workers if childcare services are to be expanded. The low-paid nature of the profession and the assumption that it is low-skilled is causing major problems in some countries. For example, in the UK the expansion of childcare is threatened by the limited supply of childcare workers. There are recruitment and retention problems for childcare workers who work in one the lowest paid occupations in the country. This is also the case in Germany where the skill-level of employees working in childcare facilities (96% of whom are female) are deemed to be relatively low and therefore poorly paid. The training of this predominantly female workforce and improving the status and pay of the profession is a key area to be addressed if the quality of care provided is to be at a level that ensures parents are comfortable with using the facilities on offer.

Table 4.1. Childcare services and dis/incentives for mothers’ employment


Country Summary of availability and costs and problems
BE There is inadequate provision for under threes. In 2002, 30% of 0-3 years olds were covered by public childcare provision (the most prevalent are day care families supervised by public authorities).
Other problems include incompatibility between opening hours of facilities and working hours and the high cost of childcare, especially for low-income families.
CZ There is inadequate provision for under threes. There are few such facilities on the whole, and those that exist offer only a small number of places. By 2010 openings in pre-school facilities should be made available for at least 33% of children up to the age of 3 and 90% of children aged 3-7 (see the National Action Plan for Employment 2004-2006). The facilities that do exist are not affordable for those on low incomes.
DK Childcare is available and is free for parents on low incomes. The use of childcare facilities by immigrants is also growing. Around 70% of childcare costs are paid by the Danish state, the municipality

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Table 4.1. Childcare services and dis/incentives for mothers’ employment (cont.)


Country Summary of availability and costs and problems
and parents pay the rest. The parents’ contribution is earnings-related, parents with joint income below a threshold (126 600 DKR) pay nothing, and contributions rise with income to reach the maximum 30% of the costs (the threshold for parents’ income for paying this is 3 995 899 DKR). Childcare for children under the age of two is the most expensive, it is however never higher than 8.4% of income.
Problems include incompatibility between opening hours of facilities and working hours, only four municipalities have given priority to 24-hour service and only in 1-2 institutions in each municipality. Those working flexible time-schedules, especially in the growing service sector, may find the opening hours incompatible with hours of work.
DE There is inadequate provision for under threes in West Germany; only 3% of the under 3 compared to 88% of the 3 to 6-7-year-olds and only for 5% for schoolchildren up to 11 years old. In the GDR 37% of all under threes could be cared for, the places for kindergarten children are 105% of the number of children and the capacities for schoolchildren is approximately 41%.
Key problems relate to the skill-level of employees working in childcare facilities (96% of whom are female) which is relatively low. The costs for childcare facilities vary between the municipalities and depend upon the length of care, the income of parents and the number of children.
EE The share of children in day care has decreased during the last decade. Childcare facilities are often not available and not accessible. Since 2003, 26% of the payment of childcare facilities (except meals) are tax exempt for parents. The budgets for childcare facilities are very limited and depend on municipality budgets. Parents are forced ‘voluntarily’ to pay extra for study materials and some other costs. In 2004, a system of alternative day care is under discussion and more small private childcare facilities are expected to open.
EL There is inadequate provision for under threes; only 3% of children under 3 years and 46% of those from 3 years old until the mandatory school age. Public crèches and nurseries are mostly run by local authorities and fees are generally low. However, every municipality is free to set its own fees and quality standards for the services provided.
Childcare services have increased but improvements in provision will need to be made if the Barcelona targets are to be reached. Problems include incompatibility between opening hours of facilities and working hours.
ES There is inadequate provision for under threes. Less than 10% of children aged 0-3 are provided with institutional childcare. There is a lack of a specific budget to cover the cost of childcare provision as well as the absence of a systematic follow-up of this measure. Consequently, there are serious doubts about the possibility of attaining the Barcelona target. The opening hours of facilities in schools for 3-6 years olds are incompatible with the working hours of parents.
FR There is inadequate provision for under threes; almost two-thirds of children under three are looked after by their parents. After 3 years, all children have the right to go to nursery school, regardless of the employment situation of their parents. The cost of childcare is a major obstacle, even though there is some financial support. Those on low incomes, therefore, have a greater incentive to use crèches, the cheapest form of childcare, but there are insufficient places (especially in rural and outlying urban areas).
ES Only 4% of pre-school children are in publicly supported childcare. The majority of parents are reliant on informal provision or private-sector provision. Availability and cost are the key problems. The cost of childcare is a major obstacle for low-paid workers wishing to engage either in full-time or part-time employment.
IT There is inadequate provision for under threes; only 6%, of under threes are in childcare while 95% of children between 3 and 6 years (mandatory school age) are covered. Availability varies between the north and the south, being more extensive in the north.
A major problem concerns the costs of public childcare for children before and after 3 years of age. While the former is quite expensive, the latter is highly subsidised but in some regions is more expensive compared to the private sector alternatives. Another key problem is the incompatibility between childcare facilities and working hours.
CY Public day care is inadequate and expensive for most families. A typical private day care costs around 100 pounds per month per child (state day care is approximately 60 to 70 pounds) with the minimum wage being only three times this much. In addition, the opening hours of most day care centres cater

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Table 4.1. Childcare services and dis/incentives for mothers’ employment (cont.)


Country Summary of availability and costs and problems
only for parents working in the governmental or semi-governmental sector (7.30-2.30 pm) and are incompatible with the working hours of parents who work longer hours in the private sector. Primary schools also finish at 1 pm and most parents are left without childcare after that time. Most working parents rely on extended family to take care of their children; i.e. grandparents.
LV At present less than 70% of pre-school children have access to a kindergarten place. Pre-school education is compulsory and free for children aged 5-6 years. In 2002, 77.7% of children aged 3 to 6, and 15.8% of children under the age of 2 attended public or private kindergarten. Problems relate to availability and costs. There are long waiting lists for kindergartens and the problem is most severe in big cities. Kindergartens are also overcrowded and the costs are increasing. In 1990 it was 4% of the average salary and in 2001 it was 10% although municipalities try to partly subsidise the kindergarten costs for poor households. Another problem is related to the short school hours of 8.30-11.00 for 5-6-year-old children and 8.30-12.00 for 7-10-year-old children. The majority of parents (especially low-income families) have no possibilities of after-school care because these facilities charge comparatively high fees.
LU The government has undertaken significant efforts to increase the supply of available childcare arrangements for young children (there is a target to create 1 800 new places by 2010). Although the number of places available has increased, only 10% of children under 3 are cared for in formal arrangements in Luxembourg. Remaining childcare problems are the following: the number of available places is insufficient and varies according to municipality; opening hours of childcare arrangements may be not compatible with working hours of parents, childcare costs are expensive, especially in the non public-funded sector where fees do not take parent’s incomes into account; and few companies provide childcare arrangements.
HU There are wide regional differences in access to childcare. In the socialist period, kindergartens and crèches were often provided in the workplace but these were closed shortly after the change in power. Since then many crèches have been closed and provision for children under 3 years of age is inadequate. Where crèches are available, they are not expensive and low-income families do not have to pay for meals in the crèches and kindergartens. However, many kindergartens have been closed due to the low birth rate. The number of places in kindergartens and crèches is limited, and in many cases a child is refused a place because the mother is at home on childcare allowance with a smaller child. Childcare institutions usually have opening hours until 5 p.m. but these are still incompatible with the long working hours of parents.
MT Malta lacks appropriate childcare facilities and there are no subsidies or tax rebates in this area. Malta is still waiting for the appropriate legislation. Parents often rely on extended family, such as grandparents, to reconcile work and family.
NL In the last two years the supply of childcare services has increased considerably but prices have also increased and the demand for childcare has stagnated. Parents pay an income-related fee, based on the household income. As a result, a problem can be that the marginal burden on the second income may be quite high. In January 2005 a new Act on childcare will come into force. This Act implies a change towards a more demand-driven system of financing. Central to the Act is that parents will receive a subsidy from the government in order to give them more opportunities in choosing childcare.
AT The lack of available childcare facilities is one of the key obstacles for mothers returning to the labour market. There is a shortage of 48 000 childcare places. Shortages are particularly a problem for children between 0 and 2 and children over the age of 6. Another 42 000 existing places are inadequate in terms of opening hours. Increasingly flexible working hours are not adequately reflected in the opening hours of childcare facilities, often making it impossible for mothers to reconcile work and family life. The Council of the European Union has repeatedly recommended an expansion of childcare facilities in Austria. With the introduction of the childcare benefit in 2002, any commitment towards a further extension of childcare facilities has been abandoned by the Austrian government (Mairhuber, 2002).
PL After 1989 both the State and firms reduced provision of these services. The state delegated responsibility for running childcare institutions to the local authorities while employers closed down their childcare centres. Under new arrangements, nurseries (for children up to 3 years) and kindergartens (for children aged 3-6) could be public or non-public but non-public kindergartens accounted only for 5% of children under institutional childcare. In the 1990s the number of kindergartens declined by one

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Table 4.1. Childcare services and dis/incentives for mothers’ employment (cont.)


Country Summary of availability and costs and problems
third and the number of nurseries by two thirds. The number of places per 100 children up to 3 years of age dropped from 10.4 in 1990 to 4.5 in 2001 and the percentage of children attending nurseries dropped in this period from 4.2 to 2.0%. In 1990 there were 72.8 places in the kindergartens per 100 children aged 3-6, in 2001 this number amounted to 82.3. The key problems are related to cost. Local governments began to face problems with maintaining the public institutions and supporting non- public ones. This resulted in a decrease in public expenditures on childcare services and rising operating costs of these institutions. Some costs were put onto parents (increased fees for meals, charges for services beyond the minimum educational program, contributions to parent’s committee funds) which particularly impacted the affordability of services for low-paid mothers.
PT The public network is fully funded by the state, whereas 62% of the costs in the non-profit private network are supported by public authorities and 38% by families. Monthly allowances per child are paid to services to reduce the cost of early childhood care as well as other costs, for example meals. Childminders, crèches and family crèches are available for children under three and kindergartens are the most common pre-school institution for children between 3 and 5 years old. The level of public childcare provision is relatively low but, in spite of the strong family support networks, the level of informal childcare is also low. This gap is filled by private and voluntary provision which offers longer opening hours. Despite the recent expansion, full-time, year-round pre-school childcare is still in limited supply and is expensive. Also, the opening hours do not accommodate the long full-time working hours of Portuguese women.
SI Institutionalised childcare is available and accessible and is provided by both the private and public sector. The share of pre-school children in institutionalised childcare has been increasing. In 2000- 2001 there were 63 328 pre-school children in kindergartens. There has also been a gradual introduction of 9 years compulsory schooling from 2000 and in the school year 2003-2004 all children aged 6 years entered elementary school. During the last years there has been an increase in inclusion of younger children (from 1-3 years) in kindergartens. Parents’ fees depend on the income per family member, number of children, family property and on the costs of the programme; they contribute 10% to 80% of the programme costs. A key problem remains the incompatibility between opening hours and the working hours of parents.
SK During the period before 1989 there was quite a well-developed network of kindergartens. This network of childcare facilities has been undermined in recent years. Between 1980 and 1985 the number of kindergartens rose from 3 723 to 3 991 and there were also nursery centres for children under 3 years old. By 2003 the number of kindergartens had declined to 3 210, and there are now only very few facilities providing for children under three and the facilities that are available are very often too costly for low-income families.
FI All children under school age (7 years) are guaranteed a municipal childcare place irrespective of the labour market status of their parents. Day care charges are fixed according to the size and income level of the family. The proportion of children aged 0-6 in day care has risen from 38% in 1985 to 48% in 2002. About 75% of these children are in full-day care. The vast majority of children under one are taken care of at home, while around one quarter of 1-year-olds and about two thirds of 3-5-years-olds are in day care. Nearly all 6-years-olds were in pre-school education by 2002. At present, all unemployed parents can get a public day care place for their children to allow them to be available to work at short notice. The municipalities also operate 24-hour day care to provide care for the children of parents who do shift work. Incompatibility between working hours and opening hours remains a problem. Every third municipality has a shortage of 24 hour care places.
SE A ceiling on the childcare fee was introduced in 2002, known as MAXTAXA. The fee was substantially reduced for most families and had a positive effect on the female labour supply. Availability can occasionally be a problem at the local level. However, this will only be temporary because the municipality is obliged to offer enough places for children in day care centres when the parent re-enters the labour market.
UK The ‘National Childcare Strategy’ was introduced in 1997 with the stated objective of ensuring that ‘affordable, accessible and quality’ childcare is available to all parents, thus helping to raise mothers’ employment rates. Under this strategy there has been an expansion of a variety of forms of pre-school and out-of-school childcare accompanied by expanded auditing mechanisms for monitoring and raising quality standards (for further details see Fagan, 2002). The expansion in childcare services in the

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Table 4.1. Childcare services and dis/incentives for mothers’ employment (cont.)


Country Summary of availability and costs and problems
UK has involved a large growth in private sector day nurseries. Parents pay between 75-93% of the cost of childcare in the UK, with the government paying most of the rest plus a small contribution from employers. Childcare costs are rising. Despite the recent expansion, the number of places is still insufficient, and full-time, year-round pre-school childcare is still in limited supply and is expensive. Also, much of the pre-school expansion is incompatible with full-time work and the long-hours culture in the UK. The expansion of childcare in the UK is also threatened by the recruitment and retention problems in the childcare sector.
BG Before the transition the childcare system was well-developed and provided services free of charge. After the changes in 1989, the existing system for providing childcare services was undermined. Availability and costs are now the key problems. As a result of the economic crisis in the period 1990-2000 the number of crèches decreased by 40% and the number of kindergartens by 27%. The current child- care system is available for everyone who is able to pay for it. However, due to the impoverishment of the population many families cannot afford childcare services, especially families with many children. This particularly affects on the large families of the Roma population.
IS In 2002, childcare provision covered 93% of children between three years old and the mandatory school age. Childcare provision for younger age groups is less extensive and covered 49.2% of one-year-old children and 83.9% of those aged two years (Nordic Council of Ministers 2003:10). Public childcare is in most cases only available to children two years and older. Therefore, many parents need to put their child in private childcare until the age of two. The relatively high cost of private childcare for children under the age of two is a problem, especially for low-income parents. Moreover, female labour force participation is lower for mothers with child/ren aged 0-6 than for those with older child/ren.
LI In recent years there has been an expansion of childcare facilities and kindergarten and nursery opening hours have become more flexible. However, waiting lists indicate that the number of places is still insufficient. Childminders (Tagesmütter) are popular alternatives to pre-school day care centres. Financial support can be claimed for childminders. Eltern Kind Forum also provides babysitters for short-term child- care needs. However, problems of costs remain. Full-time, year-round pre-school childcare is expensive. Working parents who rely on day care centres or childminders for the care of their children may be eligible for financial support, indexed to income (depending on the level of income, at least 100-160 euro of monthly costs has to be paid for by the parents themselves). Lichtenstein does not have a tradition of employers helping with childcare (an exception can be found in public administration departments).
NO The coverage rate for the 3-5 years olds is 74-85%. The coverage rate for one and two years olds is 28 and 48% respectively, while the corresponding proportion of parents of this age group who prefer a place is estimated at 70 and 86% respectively (Ellingsæter and Gulbrandsen, 2003). In relation to costs, in 2003 the Parliament reached a unison agreement on a two-step introduction of maximum parent payment for childcare services. From 1 May 2004 the maximum payment is NOK 2 750, and from 1 August 2005 estimated at NOK 1 750. Costs of childcare provided by municipalities are means-tested and low-income families pay significantly less. There is still a significant gap between the supply and the demand for child- care services. ‘Full coverage’ is the political goal for care services, which aims to provide provision to all parents for children 1-5 years old who want a place for their children. The estimate of ‘full coverage’ is 80% of children aged 1-5 years old but the demand for places already exceeded 80% in 2002, even when provision is costly (Ellingsæter and Gulbrandsen, 2003). The gap between supply and demand is likely to remain in the near future, because lower parent payment stimulates service demand. Successive governments have had to adjust the estimated targets for full coverage because of the growing preferences for childcare services among parents, particularly among those with children aged 1-2 (Ellingsæter and Gulbrandsen, 2004).
RO The lack of childcare is given as one of the main reasons for women’s low employment rate, especially in rural areas. There are targets given in the NAP Employment to provide care services for at least 90% of the children between 3 years old and the legal age for going to school by the year of 2010. The low quality of childcare services and the lack of a tradition of employers or the church helping with childcare, means parents often rely on extended family, such as grandparents.