High childcare costs ‘make women better off staying at home’

Higher childcare costs and government spending cuts have helped force women off the job market during the economic downturn, according to new research released today by a leading think-tank.

Analysis of official government figures by the Institute for Public Policy Research (IPPR) shows the number of women unemployed for more than 12 months has risen to 268,000 – one in four of the total number of females out of work.

Job insecurity for growing – with women accounting for more than 40 per cent of redundancies in the second quarter of 2011, up from 30 per cent in the first three months of the year.

The analysis shows cuts to public sector jobs – where the amount of women in employment is proportionately higher than in the private sector – have been a big factor in the trend, which is already posing political problems for David Cameron.

The Prime Minister has privately admitted the Conservative Party’s appeal to women voters has slumped according to recent opinion polls and that he needs to do more to bolster support.

Tory strategists say recent rows over plans to end child benefit for people earning over £42,000 and to increase university tuition fees to up to £9,000 a year have both proved highly unpopular with women. The party has also been hit by the fall out from pension changes which will see thousands of women in their 50s having to wait between 18 months and two years longer than expected before qualifying for their state pension.

IPPR researchers say higher childcare costs are keeping women off the job market. According to the Paris-based Organisation for Economic Cooperation and Development (OECD) Britain has some of the most expensive childcare in the world. Average costs are £97 a week for 25 hours of care, rising to an average of £115 a week in London and the South East.

Government changes to the childcare element of the Working Tax credit have also increased costs – with the average family on the credit losing £436 a year because of cuts introduced in April, according to the Resolution Foundation.

A family “second earner” – most of whom are women – will typically lose 32p of every extra pound earned in taxes and lost benefits.

More than one in four women unemployed in the UK have been out of work for more than a year, according to the IPPR analysis.The number of people unemployed in the is 2.45milion (down by just 20,000 since last year). Of these, 1.03million are women (up 42,000 since last year), with 268,000 of them out of work for over 12 months, up 14,000 on a year ago.

Dalia Ben-Galim, Associate Director of the IPPR said: “During the recession, unemployment among men increased much more than among women. But our analysis of the latest figures show that this experience is now being reversed, in large part because of the government’s public spending cuts.

“Behind the headline unemployment figures, more people are experiencing long spells out of work and long-term unemployment is rising steeply. Women are increasingly joining the ranks of the long–term unemployed and the prospects for female employment are likely to remain gloomy for some time to come. Cuts to childcare tax credits mean that for some women, work no longer pays and they are better off staying at home.”

The employment rate for women in Britain lags behind other European countries , partly because of better childcare provision overseas.

Among leading European nations, Norway has the highest female employment rate at 73.3 per cent, followed by Denmark (71.1 per cent) and Sweden (70.3 per cent)

The UK’s rate is 64.6 per cent.

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