Investing in subsidized childcare to reduce child poverty: an adequate strategy?

Publication type:

Research Paper

Series Number:

06/2019

Authors

Tine Hufkens, Francesco Figari, Dieter Vandelannoote and Gerlinde Verbist

Publication date

15 Mar 2019

Summary

Expanding childcare is often considered as a suitable way to enhance employment opportunities of mothers with young children as well as to reduce child poverty. In this study the authors critically investigate this assertion by simulating a set of scenarios of increasing subsidized childcare slots and mothers’ employment. For a variety of European welfare states we estimate the impact on poverty and on the government budget using the European microsimulation model EUROMOD. The findings suggest that to achieve significant poverty reductions among young children, both additional childcare slots and increased mothers’ employment should be well targeted. The expenditures for additional childcare slots can to a large extent be recovered by the government receipts generated by the additional employment; however, there appears to be a trade-off between the extra revenue that can be generated and the extent of poverty reduction.

Subjects

Child Development, Labour Market, Poverty, Public Policy, Welfare Benefits, Microsimulation and Caregiving

Links

https://ideas.repec.org/p/ipt/taxref/201906.html