Indecon Report on Childcare for Working Families and Implications for Employment Alan W. Gray, Managing Partner, Indecon International Economic Consultants

1. Introduction  Independent Report undertaken by Indecon International Economic Consultants  Report was Commissioned by Donegal Childcare Committee  Main Focus is on whether Childcare Represents a Barrier to Employment

2. Existing Childcare Arrangements in Ireland  405,000 households have children under 10 years of age, of which 266,000 under five  Wide diversity of childcare arrangements - 77% of pre-school children are cared for by parents or relatives  Non-parental childcare is very important for working parents - 68% with pre-school children where both are working full-time

3. Cost of Childcare

3. Impact of Childcare Costs on Employment

 Evidence shows childcare costs are high percentage of average wages – 45% for sole parents  Lower exit rates from unemployment for families with children 7

3. Impact of Childcare Costs on Employment

4. Targeting of Incentives

5. Cost Benefit Analysis

6. Exchequer Costs

7. Recommendations  Targeted childcare incentives for lower income families in employment or who are unemployed but secure employment.  Childcare amendment to current Family Income Supplement for Working Parents and Tax Allowance for low income families not eligible for FIS.  Incentives restricted to childcare expenditures provided by tax compliant and HSE registered childcare providers.