The Child Care Dilemma: A Global Problem

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Around the world, doors are opening for women in the workplace. The Saudi government has enacted a number of policies to encourage female participation in the labor force, including lifting a ban on driving. Japan’s Prime Minister Shinzo Abe wants to increase Japan’s proportion of working women to 80 percent. Several countries have set quotas to increase the number of women serving on boards of public companies.

There are a number of reasons why companies and governments are trying to woo women back into the workplace. For some, it is a response to a shrinking workforce. Others are motivated by a desire for greater diversity, particularly among executives. Regardless of motivation, most everyone agrees that increasing the number of working women can have a positive economic impact by raising family income and spurring purchasing. As an example, pwc reports in its Women in Work Index 2019 that China could increase its GDP by $497 billion if it matched its female employment rate to that of Sweden’s, which is 76 percent.

Despite these positive steps, child care issues in many parts of the world are deterring women from full-time employment.* A poll of U.S. workers commissioned by Workplace Options found that women were three times more likely than men to have considered quitting a job due to child care issues. In its “Back to Work” white paper, healthcare company Maven reports that 43 percent of women end up leaving their careers after giving birth.

The cost to employers is significant. Ernst & Young has reported that replacing a new mom who doesn’t return to work costs them an estimated 150 percent of her salary. U.S. businesses lose approximately $4.4 billion annually due to employee absenteeism as a result of child care breakdowns.

In many countries, the high cost of child care is a disincentive for women to join the workforce. In the United Kingdom, child care expenses make up approximately 33.8 percent of household income, making it the most expensive country in term of child care costs. The UK is followed by New Zealand (29.0 percent) and Ireland (27.4 percent).  In the United States couples spend approximately 25.6 percent of their family income on child care.

On the other hand, families in Korea, Austria, Greece and Hungary, where child care is highly subsidized, are paying less than 4 percent of their household income on child care. Several studies show that access to subsidized child care can increase maternal workforce participation. For example, a study conducted in Kenya found that mothers who received subsidized child care were 17 percent more likely to be employed than mothers who did not. In Brazil, subsidized child care increased women’s participation in the workforce from 36 percent to 46 percent.

Unfortunately, Brazil faces another common child care issue – lack of quality, available child care. In San Paolo, 34,000 children were on a waiting list in 2018 for a spot in one of Brazil’s state-run child care facilities. It is a similar situation in Japan, where 20,000 babies and toddlers are on waiting lists for publicly subsidized day care.

For parents who are able to find child care, other issues can arise. When a regular caregiver is not available, back-up care is needed. In Workplace Options’ poll, 37 percent of U.S. employees polled reported they had missed work in the last three months due to a child care breakdown.

In its Tackling Childcare Report, the International Finance Corporation (IFC) offers a number of potential solutions to the child care crisis, including:

  • Employer-run child care centers
  • Employer partnerships for child care
  • Child care subsidies, vouchers
  • Emergency, back-up care resources
  • Flexible work arrangements
  • Child care referral/information services

The IFC report uses case studies to illustrate how employers have benefited from improving employee access to child care. Those benefits include improved recruiting, retention, productivity, diversity and community recognition.

While it seems unclear whose responsibility it is to solve the child care dilemma, it is obvious that families, companies, and countries around the world stand to benefit from a solution.

 

*While the number of fathers providing child care is growing in some countries, globally mothers spend significantly more time on unpaid care and domestic work.

 

Workplace Options helps employees balance their work, family and personal needs to become healthier, happier and more productive, both personally and professionally. The company’s world-class employee support, effectiveness and wellbeing services provide information, resources, referrals and consultation on a variety of issues ranging from dependent care and stress management to clinical services and wellness programs. To learn more visit www.workplaceoptions.com.