higher child care costs have not reduced labour participation of parents

The Dutch government cut back on child care allowances in the period 2009-2013. According to figures released this week by Statistics Netherlands, the subsequent higher child care costs have resulted in young children spending fewer hours in formal child care. In spite of this, the participation of their parents on the labour market has not changed in comparison with parents of older children.

Less subsidy, less formal child care

Central government and employers have compensated parents less and less for claimable child care costs in recent years. In 2009 they reimbursed 76 percent, by 2013 this had fallen to 63 percent. The number of hours at crèches, out-of-school care and childminders declared by parents has diminished every year since 2009. At the same time, the working hours of mothers rose slightly. Parents appear to have replaced the more costly formal child care by other alternatives, including informal child care.

Average number of hours of formal child care and working hours of mothers with young children

An extensive analysis of the effects of the child care allowance economisation on labour participation of parents in the period 2005-2013 is published this week in Economisch Statistische Berichten, a leading Dutch economics journal.