Universal childcare isn’t always the best deal for youngsters

If it turns out centre-based care is harmful for many children, is it appropriate for taxpayers to subsidise ever greater access to it? Picture: Getty

Last week I wrote about the option of introducing low flat-fee universal childcare, something Anthony Albanese is rumoured to support. Costing at least an extra $8.3bn annually – on top of the current outlay of $14bn on childcare fee relief – the change would be expensive and favour the top income quartile of households.

The modelling suggests this extra spending would have virtually no impact on the rate of female labour force participation. In other words, the additional expenditure would not result in more hours of work overall, debunking one of the typical justifications for more government spending in childcare.

But there’s a more fundamental question: is childcare good for children? If it turns out centre-based care is harmful for many children, is it appropriate for taxpayers to subsidise ever greater access to it?

Among advocates it’s an article of faith that children benefit from long daycare relative to those who do not attend. But much of the research is poor quality and politicised. Most studies fail to control the key variables; they confuse correlation with causation.

Take this claim from Karen Thorpe of the University of Queensland’s Queensland Brain Institute: “(If) you could be in (quality childcare) seven days a week you’d be doing really well.”

This is an astonishing assertion. Even the more measured claim by the Australian Institute of Health and Welfare that “children under three in high-quality care, in general, academically outperform their peers who do not attend childcare” can be queried.

We know disadvantaged children are under-represented in formal childcare. We also know children with high-income earner parents or guardians can access the best quality care. In their first year, children see themselves as attached to their mother, and our public policy stance reflects this: employers are legally bound to provide one year’s leave of absence after the birth of a child.

Until the age of three, children primarily participate in parallel play rather than playing with others their own age. It’s only when they reach preschool age that socialisation becomes important, so it’s essential to distinguish between the impact of childcare and of preschool.

What do the best studies tell us? The Quebec experiment is pertinent because the province has run a low flat-fee childcare arrangement for many years. The results are worrying. Comparing children in Quebec with those across the rest of Canada, it has been established that the social development of children in Quebec deteriorated after the program was rolled out.

The comparison of children aged two to four who had been part of the program with their older siblings who had not revealed a greater prevalence of anxiety, hyperactivity and aggression.

A gold-standard study by Michael Baker, Jonathan Gruber and Kevin Milligan appeared in the American Economic Journal in 2019. Their conclusion: “The Quebec policy had a lasting negative impact on non-cognitive skills. At older ages, program exposure is associated with worsened health and life satisfaction, and increased rates of criminal activity … In contrast, we find no consistent impact on their cognitive skills.”

There are studies that point to positive effects of childcare on children. A recent edition of The Lancet pointed to European evidence on the positive cognitive and non-cognitive impacts, which are in contrast with many of the investigations from North America. There is a consensus among the studies that the quality of childcare is an important variable. But what defines quality? Is it about staff-to-children ratios? Staff qualifications? Physical amenity of the centres? According to Thorpe, “simply supervising a child while they play with toys is not enough. To develop best, children need lots of interaction with adults … The more interactions you get, to-and-fro, the more it builds the structures of the brain.”

I may be missing something but good quality childcare sounds a lot like stay-at-home parenting.

The estimated impact of the flat-fee option being floated on demand for childcare is an increase of 10 per cent. Apart from the difficulty of achieving this increase in the supply of places to meet extra demand, it would be entirely predictable that quality standards would slip, at least short term.

There is a certain irony to the discussion about childcare options occurring as the most recent figures on fertility in Australia have been released. At 1.5 babies per woman, this figure for last year was the lowest recorded since 1935. A replacement rate would require a figure slightly above two, a figure last reached in 2008. The average age of new mothers has been steadily increasing.

It’s perfectly understandable that the message childcare is good for kids has widespread endorsement: if you have no choice but to enrol in childcare, the message is comforting. It’s just that the message may not be true.

There’s a strong case for rethinking how we treat parents with young children and to move away from the obsession with centre-based care. Should we consider child tax credits as in the US, with the parents free to use the money in whatever way they wish, including one parent staying home? Should we split incomes between parents for tax purposes? Should we make the cost of (regulated) nannies a legitimate tax deduction – it could be capped – for parents who opt for this form of care?

No one is proposing we return to the 1950s with Mum in the kitchen. But there are better ways of allowing parents to balance work and family life apart from simply providing more and more subsidies to childcare centres.