Could universal childcare boost women’s workforce participation?

There’s no doubt women’s participation in the workforce is improving. However, many believe that more needs to be done to address this issue. For some, universal childcare is seen as a silver bullet to encourage more women into the workforce. The Federal Government recently committed $5 billion to cover higher educator wages and remove the activity test, plus $1 billion to boost childcare supply.

However, experts say to achieve long-term success, these steps must be sustained and expanded for long term success. A key argument is that it would encourage more women to re-enter the workforce. However, opinions on whether this is actually true are mixed.

So, would universal childcare actually increase women’s participation in the workforce?

How Universal Childcare Could Increase Women’s Workforce Participation

Some experts argue that childcare costs deter women re-entering the workforce. Not only does this negatively impact the women involved, it also deprives the workforce of valuable talent and skills.

There’s no doubt universal childcare would be an expensive policy. The Grattan Institute has estimated that a high-quality universal early childhood care system could cost $10 billion annually. However, studies have suggested that the economic benefits of encouraging more women in the workforce would be significant. They reveal that if Australian women increased their working hours by just 2 per cent, the country’s GDP would grow by $11 billion. Meanwhile, achieving gender parity in the workplace would provide Australia with an economic boost of $128 billion.

The Australia Institute estimates that universal childcare would boost GDP by $24 billion annually and unlock a workforce of 264,000 women.

The Limits of Universal Childcare in Getting Women Back to Work

There’s no doubt that increasing women’s participation in the workforce would achieve great economic benefits. However, the extent to which universal childcare would deliver this outcome is debated. A report by the Productivity Commission found that while one million Australians say their working hours are constrained by parenting, only 328,000 say they would work more if childcare was more accessible.

However, it is important to consider that many of these workers already work part time. Therefore, at most 143,000 workers would be added to the workforce if all barriers to accessing childcare were removed.

Why Universal childcare is still worth pursuing

Regardless of whether or not it increases the workforce participation of women, universal childcare could still be a worthwhile pursuit.

Currently, access to chilcare is not equal across all sections of Australian society. However, research indicates that universal childcare would lead to greater use of childcare among disadvantaged groups. This includes lower-income households, migrant families and families of children with a disability. Therefore, increasing access to childcare would have a positive effect on the learning outcomes of children in these groups.

Additionally, quality childcare has been shown to have a significant positive impact on children’s early development. Early development is crucial given that 90 per cent of children’s brain development occurs before the age of five.

Improving access to childcare can also lead to improved health outcomes for children and reduced crime rates. Therefore, the potential cost of the policy can be offset by savings in other areas.

Whether universal childcare would increase women’s workforce participation is debatable. However, this does not mean the pursuit is not worth exploring.

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