Grandparents as Child Care Providers: Factors to Consider When Designing Child Care Policies

Formal child care services can expand womenÕs economic opportunities and promote equity through early childhood development. However, academics and policy makers often overlook the role of relatives as child care providers. This note discusses how grandparent-provided child care can be factored into child care policies in the context of Organisation for Economic Co-operation and Development (OECD) countries. Omitting the role of relatives when estimating costs and benefits of child care programs can give biased and incomplete results that might even reverse certain programs. The focus of this note is on the opportunity cost of relativesÑparticularly grandparentsÑwho care for children. Not just governments spend on child care programs Ñgrandparents spend considerable time caring for grandchildren. Depending on their labor market status and work history, grandparentsÕ opportunity cost could be high or low; governments should factor in such costs when evaluating programs. The Netherlands and the United Kingdom are experimenting with policies that formally support grandparent-provided child care.