The effect of free childcare on maternal labour supply and child development

The UK government spends billions of pounds a year to ensure that all 3 and 4 year olds have access to childcare and early education for 15 hours a week, 38 weeks a year. There is ongoing debate about whether (and by how much) to increase families' entitlement, as well as a specific plan of the government to extent the entitlement to 2 year olds in England from low-income families. Yet there is surprisingly little evidence on the causal impact of this specific (and very high cost) intervention.

This is the most comprehensive attempt using UK data to analyse the effects of free childcare provision on maternal and childhood outcomes. In order to address issues of causality we will use different instances of exogenous variation in the availability of free childcare for pre-school children in England. In particular, we will look at (i) the provision of free part-time childcare to the most disadvantaged children which characterised the UK policies of the 1990s, (ii) the provision of universal entitlement to free part-time childcare introduced in the early 2000s, and (iii) date-of-birth discontinuities in entitlement to part-time pre-school care and full-time school education. Our results will relate to different time-periods, policy settings and groups of families and therefore will inform on the effectiveness of various policy parameters.

Our project will extend on previous work in this area by considering whether free provision of childcare affects maternal outcomes other than participation and hours of work, such as working patterns, search behaviour and participation in further education. We also plan to consider a wide range of childhood outcomes, including teachers' assessments of children's development at age 5, and educational attainment at ages 7 and 11, as well as children's British Ability Scales observed at ages 3, 5 and 7, and Strengths and Difficulties Questionnaire scores measuring pro-social behaviour, hyperactivity, emotional, conduct and peer problems, also assessed at ages 3, 5 and 7. We will investigate whether the amount of free pre-school education affect cognitive outcomes net of the "age at exam" and "age of starting school" effects.

Our project will use a number of secondary data sources. First, we will use data on the number of free nursery places by Local Education Authority, which comes from annual School Census data (1975-2001) and from published statistics on number of free nursery places by Local Education Authority since 2001. Second, we will use the National Pupil Database (NPD) to examine the impact of pre-school childcare on children's outcomes at ages 5, 7 and 11; the NPD is a register data set held at the Department of Education which contains attainment data on all pupils in England. Third, we plan to use data from the Millennium Cohort Study, one of the ESRC's flagship data investments. Fourth, to investigate the effects of free childcare provision on parental labour supply in the 1990s and 2000s, we will make use of household survey data, principally the Labour Force Survey.

The output of this research will be at least four papers to be submitted to peer-reviewed journals. Moreover, we will write a policy paper which summarises recent UK trends in mothers' employment and childcare use, and pulls together the results of the separate projects to draw policy conclusions cutting across the separate projects. We have partnered with the Daycare Trust and are engaging with the Institute for Public Policy Research.

We anticipate this project will have a considerable impact outside the research community. Potential beneficiaries include:

Civil servants, politicians and other policy-makers. Our research will directly evaluate the impact of free childcare/early education in England on parental employment and children's outcomes and will thereby provide valuable information that enables policy makers to review and improve their current policies and strategies. Our findings will be of direct relevance to - and inform policy decisions of - officials in the Department for Education and local authorities who are responsible for early years policy, as well as to officials in departments such as Department for Work and Pensions (which is interested in the ability of childcare to enable parents to work), the Child Poverty Unit and the Cabinet Office (which are interested in the scope for early intervention to increase social mobility), and HM Treasury, as well as to the equivalents of these departments in the governments of the devolved nations.

Practitioners and non-governmental organisations. Our project will benefit think-tanks and non-governmental organisations with an interest in childcare policy, early education or parental employment. As well as our project partner, the Daycare Trust, these include IPPR, Child Poverty Action Group, Family and Parenting Institute, Barnados, Save the Children, Gingerbread, the Resolution Foundation, the Work Foundation, the Fabian Society and the Trades Union Congress. Interested practitioners include childcare providers and primary school teachers and managers. They will gain a greater understanding of the ability of a key part of government policy on childcare to affect parental employment and children's outcomes.

The economy. The economy will benefit from improved policymaking based on more accurate and relevant information about the benefits of such a large and expensive government intervention. To the extent that our findings lead to improved policy-making that helps mothers return to work, the economy will benefit through a broadening of the tax base and the retention of the skills needed for economic growth. Moreover, as our research contributes to making sure that children from deprived backgrounds benefit as much as possible from the educational element of childcare, the research will contribute to reducing inequalities in society and enabling each child to reach its full potential, with benefits to economic performance in the long run.

Families. This research concerns a large-scale government intervention which directly affects over 1 million children a year in England and their families. Our findings about the impact of early education or childcare on children's outcomes will be of interest to many parents and will help them make decisions about the use of childcare. Moreover, mothers will benefit if improved policies enable them to return to work if they wish, and so help reduce the gender wage gap and advance gender equality.

Private companies. Private companies rely on a skilled workforce, so improvements in policies that target child development and maternal labour supply will help them to retain valued employees (mothers) in the short term and develop a well-trained, broad workforce (today's children) in the long term.

Media/the general public. We anticipate that the outputs of this project will be of interest, as issues to do with maternal employment and the use of childcare are popular topics with the media. Many people will relate to, or have an opinion about, our findings, so the public will benefit from a discourse about these topics.

The project team. The PI on this project (Rabe) has not previously led a project of this size and will acquire additional managing skills. The team will benefit by broadening their research profiles and by establishing cooperation between ISER and IFS.