Is the huge additional money being put into daycare by the State providing value for money from a taxpayer point of view? To judge from a recent ESRI study, the answer is no. The effect of the particular means-tested daycare subsidy under examination by the ESRI article was to attract only 1,100 additional mothers into the workplace at a cost of €160 million, or €150,000 each. Does that seem like value from money?
If you recall, a year ago Irish voters overwhelmingly rejected the government’s proposed constitutional amendment on carers and reaffirmed that the present Article 41.2 which says the State should ensure mothers are not forced by “economic necessity” to work outside the home.
Yet, as this anniversary passed unnoticed, it seems the government has learned little from the result. Family policies are nearly all aimed at mothers in the workplace, even though surveys show that the vast majority of mothers would prefer the option of staying at home if financially feasible.
According to new figures from the Central Statistics Office (CSO), there has been a 60pc decline in the number of women describing themselves as full-time homemakers. In 2010, 520,500 women of working age reported their status as “engaged in home duties”. By 2024, that figure had fallen to just 208,200, a huge shift in a little more than a decade.
At the same time, an Amárach Research poll, commissioned by the Iona Institute last year, found that 69pc of mothers with children under 18 would choose to stay at home to raise their children if they could afford to do so. This suggests that, for a large majority, employment is more a financial necessity than a choice for mothers. This shows that mothers are, in fact, being forced out of the home by economic necessity.
The poll results indicate that many mothers do not feel they genuinely have that choice. Instead, they often feel pressured to earn income, and they perceive that the role of a full-time mother is undervalued in modern Ireland.
Despite the constitutional commitment to giving mothers more freedom to choose between the home and the workplace, government policies continue to prioritise workforce participation over the home. Nowhere is this more evident than in the State’s heavy investment in day-care subsidies.
The recent Economic and Social Research Institute (ESRI) analysis examined the impact of Ireland’s daycare subsidy schemes on maternal employment. It found that the introduction of generous additional (in this case means-tested) subsidies in 2019 led to only a slight increase—about 0.5 of a percentage point—in labour force participation by mothers.
With the number of women who work in the home now so low, daycare subsidies seem to have hit the law of diminishing returns, meaning the more the Government spends on daycare at this stage, the less effect it is having on additional workforce participation and extra tax revenue.
The additional daycare subsidy the ERSI was looking at cost the State around €160 million (the ESRI informed The Iona Institute) but resulted in just 1,100 additional mothers entering the workforce.
As pointed out already, this means that for each additional mother in the workplace, the cost to the State is an eyewatering €150,000. This makes no sense whatever.
The ESRI says that if the subsidy it examined was not means-tested it would draw more mothers into the workplace, but that would cost the taxpayer even more and the ESRI seems to be saying in the report would “increase labour supply by increasing the full-time rate of mothers with young children by 1 percentage point”. That doesn’t seem like much.
The Government might reply that it is still worth it because it still makes daycare more affordable to those using it. Nonetheless, the Government should ask whether the tiny effect on workforce participation by mothers is worth the huge cost, especially when we might consider fairer ways to use that money.
For example, that €160 million would allow the State to give €3,000 per annum as a direct payment to around 50,000 mothers, who could then spend the money either on daycare or to make it easier to stay at home. If the Government wanted to give €3,000 per annum to all mothers with children under the age of six, it would cost about €1bn, which is the same amount Budget 2024 aimed to put into daycare.
One year after the referendum, the question remains: is the State truly upholding its constitutional duty to ensure that mothers are not economically forced into the workforce? The data suggest otherwise. As the Government continues to prioritise policies that assume all mothers want to work, the voices of those who would choose otherwise remain largely unheard.
Image by Alexander Vollmer from Pixabay
