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Jeremy Hunt gave us his “back to work” budget last week. A £1bn giveaway to those with pensions worth £1m-plus has proved the main point of Westminster controversy.
But more likely to be talked about round the country is the £5bn offer to working parents of 30 hours’ free childcare for children from nine months up.
The goal is to see more parents (primarily mothers) of young children in work. Will it work? Most think it’s intuitive that subsidised childcare means more parents can afford to work, but the evidence hasn’t always been clear cut. Giving free childcare to already employed parents can lead them to cut back on work because they are now better off.
An Institute for Fiscal Studies paper, co-authored by one of my Resolution Foundation colleagues Mike Brewer, offers some reasons for optimism. It shows that free childcare offers do make a difference to maternal employment when they’re full rather than part time – as this one is.
The government’s official forecaster, the Office for Budget Responsibility, takes optimism from this research, estimating the new policy will boost employment by 60,000. That might not sound like much, but remember childcare is just one part of the jigsaw underpinning rising female employment, along with more women going to university and the slow death of patriarchy. The results can be big.
In 1997, just 40% of single parents were in work by the time their child turned three. Now it’s 60%. For mothers in couples, that rise was from around 65% to almost 80%. That translates into more than 500,000 more mothers of children under five in work today. Never mind one policy change, that’s real social and economic change in action.
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