How improving childcare brings benefits for everyone

There are 679 million children younger than five years of age in the world today—almost one in 10 of the world’s population. Who looks after these children when parents go out to work, and what are we missing when we do not consider this point? Classically it is the mother who provides a solution, but to reconcile care needs with the need to earn a living, and in the absence of affordable childcare services, she may be forced to leave the labour force altogether or take on lower-quality, lower-paid jobs.

Both governments and the private sector have significant and different roles to play in changing this scenario, and both need to be sensitively maximized to resolve the current situation.

The IFCs recent report Tackling Childcare: The Business Case for Employer-Supported Childcare highlights what the employers in the formal sector can do to change this. It shows that when companies take innovative approaches to support childcare, this improves punctuality, reduces absenteeism and stress, increases productivity and motivation for women and men, and increases the company’s ability to hire and retain talented people.

The case is compelling for large companies who are able to act with enlightened self-interest and provide high-quality childcare to their employees. But what about women who work in small businesses, which often already struggle to meet the social security obligations for their employees and may not be in a position to fund childcare? These businesses account for a significant share of employment. In the United States, for example, 17 per cent of the workforce work in companies with fewer than 20 employees. And small and medium-sized enterprises account for 60 to 70 per cent of jobs in most OECD countries.

The situation is even more complicated in developing countries where up to 95 per cent of employed women work in the informal economy, without an employer who could be mobilized to invest in childcare services for their children. Many of these women are self-employed—working as street vendors, waste pickers or home-based workers. Women in the informal economy were identified as a key area of work recently in a high-level report, which argued that as care is a universal right and an essential building block for economic growth and women’s economic empowerment, care deficits for unpaid carers and workers should be acknowledged and resolved.

In 31 developing countries surveyed, only four per cent of women reported using childcare services, with almost 40 per cent minding their children themselves. This means nearly half the world’s children— especially girls from marginalized populations—are likely to miss out on opportunities in early childhood that impact their learning outcomes, skill development and future income-earning capacity.

Investing in affordable childcare is therefore a critical issue for greater gender equality and the advancement of women in the workforce, and good childcare is a sine qua non for our children’s learning and development, with lifelong consequences. Currently, comprehensive early childhood education and care services attuned to the needs of working families are scarce, particularly for younger children and in many developing countries, where public childcare provision is uncommon and most parents cannot afford market-based solutions. As a result, coverage is often low and highly unequal.

We urgently need to find childcare solutions that are collectively financed and work for all women and men. Good models exist to emulate: Sweden has long been a leader in providing public childcare services for all children, independent of their parents’ employment status. Since 2013, Germany has guaranteed a slot at a day care facility for every child over 12 months of age, hoping to boost both female employment and low fertility rates. In Chile, the Government quadrupled its provision of public childcare services between 2006 and 2010, offering them free of charge for those with the lowest incomes. Similarly, the government of Ecuador has expanded and strengthened its free community-based childcare services, achieving an increase in coverage among children five years and younger from less than three per cent in 2000 to over 22 per cent in 2015.

Taking quality childcare service provision to scale requires not only careful planning and regulation, but also resources—a significant challenge in the face of current budget constraints. In addition to governments prioritizing public investment in suitable infrastructure and services, businesses can also contribute importantly. They can provide decent and attractive working conditions for staff, and ensure that they pay their fair share of tax in the countries they operate. This will allow governments to make the kind of large-scale social investments that are needed to provide services and protection for all those who need them. This will, in the end, benefit everyone by creating a healthier, more flexible and more creative workforce now and in the future.

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