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Can Parents Afford to Work?: Childcare Costs, Tax-Benefit Policies and Work Incentives

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Author Info
Herwig Immervoll
David Barber ()

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Abstract

Finding a suitable balance of work and family life is not an easy task for parents who face multiple, and potentially conflicting, demands. Childcare policies play a crucial role in helping parents reconcile care and employment-related tasks. But inconsistent or poorly implemented policies can also introduce additional barriers that make it harder for families to arrange and share their responsibilities according to their needs and preferences. This paper quantifies the net cost of purchasing centre-based childcare in OECD countries taking into account a wide range of influences on household budgets, including fees charged by childcare providers as well as childcare-related tax concessions and cash benefits available to parents. Building on these calculations, family resources are evaluated for different employment situations in order to assess the financial trade-offs between work and staying at home. Results are disaggregated to identify the policy features that present barriers to work for parents whose employment decisions are known to be particularly responsive to financial work incentives: lone parents and second earners with young children requiring care.
Trouver un juste équilibre entre le travail et la vie de famille n’est pas toujours facile pour des parents confrontés à des contraintes multiples, potentiellement contradictoires. Les mesures en faveur de la garde des enfants jouent un rôle essentiel pour ce qui est d’aider les parents à concilier ces responsabilités et les contraintes liées à un emploi. Mais des politiques incohérentes ou mal mises en œuvre peuvent aussi créer des obstacles supplémentaires qui feront qu’il sera plus difficile encore pour les familles de s’organiser et de partager les tâches en fonction de leurs besoins et de leurs préférences. Il s’agit ici de mesurer le coût net de l’achat de services de garde d’enfants dans des structures spécifiques, dans les pays de l’OCDE, en faisant intervenir tout un éventail d’éléments qui influent sur le budget des ménages, à savoir notamment les tarifs pratiqués par les prestataires de services de garde ainsi que les avantages fiscaux et prestations en espèces dont les parents peuvent bénéficier au titre de la garde des enfants. En s’appuyant sur ces calculs, on évalue les ressources des familles dans différentes situations d’emploi afin de mettre en évidence les termes du choix financier entre travailler et rester à la maison. Les résultats sont affinés pour faire apparaître les éléments, dans les dispositifs publics, qui créent des obstacles à l’emploi des parents dont on sait que la décision d’emploi est particulièrement sensible aux incitations financières en faveur de l’activité : en l’occurrence, parents isolés et seconds apporteurs de revenu ayant de jeunes enfants qui doivent être gardés.

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Paper provided by OECD Directorate for Employment, Labour and Social Affairs in its series OECD Social Employment and Migration Working Papers with number 31.

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Date of creation: 16 Dec 2005
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Handle: RePEc:oec:elsaab:31-en

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Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Johannes Geyer & Viktor Steiner, 2007. "Short-Run and Long-Term Effects of Childbirth on Mothers’ Employment and Working Hours Across Institutional Regimes: An Empirical Analysis Based on the European Community Household Panel," IZA Discussion Papers 2693, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Peter Haan & Katharina Wrohlich, 2007. "Optimal Taxation: The Design of Child Related Cash- and In-Kind-Benefits," IZA Discussion Papers 3128, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Johannes Geyer & Viktor Steiner, 2007. "Short-Run and Long-Term Effects of Childbirth on Mothers' Employment and Working Hours across Institutional Regimes : An Empirical Analysis Based on the European Community Household Panel," Discussion Papers of DIW Berlin 682, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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