Economists claim huge cost benefits for free child care

Providing child care for all one to four year olds could be
worth around £40bn to society, according to a new economic
analysis.

Moving towards universal child care could bring immediate
significant benefits in terms of higher female employment and
earnings, said the report by economists at
PricewaterhouseCoopers.

In the longer run, there would be additional benefits in terms
of increasing the lifetime earnings of mothers who would not need
to take prolonged career breaks, as well as possible benefits to
the future productivity of children from less advantaged
backgrounds, who would receive good quality pre-school child care
under the scheme.

The report, published as a policy paper by national child care
charity Daycare Trust, is the first study to quantify the potential
economic costs and benefits of universal pre-school child care over
the full working lifetime of both the parents and the children
affected by the policy.

Stephen Burke, director of Daycare Trust, said: “We can create a
lasting legacy of children’s centres in every community,
providing child care and early years services that every family can
use.

“This report provides a child care challenge for the government.
Clearly, in the long term, the benefits of investing in quality
child care for children, parents and the whole country will pay
huge dividends.”

Over the first 20 years, during which it is assumed that
universal child care would be phased in, the study estimates that
the overall economic benefits to society would broadly match the
overall costs of provision.

However, the long-term net benefits could accumulate to around
£40bn over a 65-year period although these estimates are
subject to significant uncertainties, particularly in relation to
the increase in female employment resulting from the move to
universal child care provision.

David Armstrong, senior economist at Pricewaterhouse
Coopers’ Belfast office and co-author of the report, said:
“It might be that the benefits of investing in child care and
pre-school learning could be greater than investment in education
at later ages, given that a very significant part of cognitive and
non-cognitive skills development occurs before children start
school.”

– Universal Pre-school Child-care Provision: Towards a
Cost-Benefit Analysis for the UK from the Daycare Trust, tel:
020 7840 3350. Report also available via
www.pwc.com