David Mayes: Mums pay high price for childcare

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Innovation and flexibility are needed to help working parents share responsibility.

Many parents underestimate how much children cost, both in economic terms and in lost opportunities. Photo / Getty Images
Many parents underestimate how much children cost, both in economic terms and in lost opportunities. Photo / Getty Images

Looking after children is expensive and most people underestimate the cost.

That cost is not just in terms of the money we pay out at the time, but also the non-monetary opportunities we forgo because of it and the costs we pay in later life when we find ourselves with both poorer quality and poorer paying jobs, leading to financial difficulty in our retirement.

No one disputes the enormous benefits - mostly non-monetary - that come from having children. However, starting a family may be a heat-of-the-moment decision rather than a well-thought-out plan.

Even when the decision is reasoned out, many of us don't fully consider the future cost to us, our existing children and society as a whole. We may not think about our income in retirement, our responsibilities to other children, education quality and the cost for grandparents.

Then, after having these children, few parents today have the money and favourable family circumstances to do exactly as they want in looking after them.

Most cannot choose personal optimal combinations among looking after children themselves, paying others to do it, getting family help and, most importantly, dividing responsibility among the parents.

On the whole it tends to be mothers who lose out, especially in the long term, and that discrimination is something women in this country suffer alongside their counterparts throughout the world.

Most people have to rely, at least in part, on resources provided by others, particularly the state, and hence are subject to others' preferences. Most welfare systems impose considerable restrictions on choice within a three-dimensional space defined by the relative importance of income, employment and inclusion in society.

All systems have pluses and minuses. If employment is emphasised, then benefits will be lower if people do not take up jobs - that is difficult for those with strong views on the importance of parents looking after children. When income is emphasised, public-provided childcare is likely to be limited and poorer people will struggle to afford it.

However, many innovative ideas are appearing, including breakfast clubs for children before traditional nurseries open, and organisations that feed children dinner for parents who work late, enabling people to get round many of the constraints they face.

Of the childcare systems we studied, Norway - where the standard of living is high enough that those with the lowest incomes can choose how to care for children and where support is available for both parents to provide childcare - seems the fairest. The Netherlands has the best developed system for sharing the burden, as having part-time jobs is common there.

But there are problems over constraints. Some countries insist that parents share the initial burden by having "daddy quotas" as well as maternity leave to reduce discrimination against women. But if this reduces the family's income, does it make sense for all couples?

Often the position is best for those who have grandparents to provide care. But what happens to early education in these circumstances? Some grandparents may be better at it than others, and professional care may give children a better start.

The problems are worse for single parents. They cannot share the burden of care, and one income shrinks their range of choices. Incentives matter here, as does the preference of society. At some point there are concerns that parents' childbearing choices place too great a burden on society but, on the other hand, no one wants to penalise the child.

Unpleasant decisions have to be made when resources are limited. But the enormous range in people's circumstances alters the resources available.

Expanding the range of choice seems the way to go, but that is costly. Society is divided about how large that cost should be, and exactly how far the state should get involved in intimate family decisions such as how many children we have.

Whichever way we go, reducing the inequality mothers face in childcare is a priority not just for them and their children, but for society at large.

David Mayes is professor of banking and financial institutions at the University of Auckland business school. He and colleague Mark Thomson from the university's Europe Institute have just published a book, The Costs of Children: Parenting and Democracy.

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