CSB Working Paper, 2011, 6: Who reaps the benefits? The social distribution of public childcare in Sweden and Flanders

The main goal of this paper is to unravel the social distribution of childcare policies: who benefits from government investment on public childcare? If childcare policies are mainly used by those already working, and (scarce) budgetary resources thus end up with the higher income brackets, genuine concern arises about the distributional consequences of childcare policies on the one hand, and its effectiveness as an instrument to activate mothers with young children into the labour market on the…

The main goal of this paper is to unravel the social distribution of childcare policies: who benefits from government investment on public childcare? If childcare policies are mainly used by those already working, and (scarce) budgetary resources thus end up with the higher income brackets, genuine concern arises about the distributional consequences of childcare policies on the one hand, and its effectiveness as an instrument to activate mothers with young children into the labour market on the other. Answering this question is a complex endeavour, because one has to simultaneously take into account the (possibly income-differentiated) tariff structure of childcare services and private childcare costs (parental fees), government expenditures (subsidies to childcare providers) and tax concessions. In this contribution, we develop a fine-grained analysis to reveal the distributional impact of public childcare for two countries (Flanders/Belgium and Sweden) already reaching the Barcelona targets for under 3s and interpret the results in a European perspective. We find that, although both cases report high coverage rates, Sweden and Flanders have very different and even opposite distributional outcomes. Both examples provide us with valuable lessons on the redistributive nature of “new risk policies” and the effectiveness of childcare as an instrument of labour market activation.