Childcare is No Longer An Option


Dr Barbara Broadway and Dr Esperanza Vera-Toscano reported this week that The HILDA Survey suggests single-parent households in Australia are abandoning formal childcare as they face greater poverty rates

While we have seen as a long trending outcome in the global labour market,  is the growing level of participation of mothers and over the last two decades here in Australia the rise in younger children attending format childcare services.

However, what has emerged from the Household, Income and Labour Dynamics in Australia (HILDA) Survey is actually a steep fall in the use of formal childcare among single-parent households, which by and large are headed by women.

Broadway and Ver-Toscano draw attention to the fact that while it is unclear what’s driving this trend, it’s potentially a sign that many single parents simply can’t afford formal childcare. If so, they argue,  it risks kicking off a vicious cycle where a lack of money, a lack of childcare and a lack of employment opportunities trap single parents in entrenched disadvantage.

The annual HILDA Survey of 17,000 Australians found that back in 2016, some 52 per cent of single-parent households with kids aged under four, used formal childcare. But in 2018, that share has dropped to just 35 per cent. The same trend isn’t observed among coupled parents.

Broadway and Ver-Toscano indicate this is a worrying new trend which doesn’t appear to be an obvious explanation. That it sets up single parents for a host of logistical problems in juggling multiple care arrangements and unreliable access to care, which can jeopardise their employment in the longer term.

In parallel with single parent’s decreasing use of childcare, the HILDA Survey had already been showing a substantial increase in relative poverty rates among single-parent households – from 15 per cent in 2016 to 25 per cent in 2018, well above the 10.7 per cent overall rate of relative poverty.

Given the devastating effects of COVID-19, Broadway and Ver-Toscano indicate we can expect that the number of single-parent families entering a cycle of poverty and entrenched disadvantage will only grow further.

It appears that even after the recent increase in subsidies, our childcare system is badly set up to help them find a way out.   This finding in the HILDA Report does indeed point towards a vicious cycle where lack of income (whether it is because the single parent is unemployed, or employed on a low wage) prompts families to opt out of childcare, worsening their economic position down the track even further because work opportunities are more constrained.

Source: Dr Barbara Broadway and Dr Esperanza Vera-Toscano
In Melb Unu publication “Pursuit” Nov 2020

HILDA Survey – Household, Income and Labour Dynamics in Australia Survey,
Funded by the Australian Government through the Department of Social Services
Managed by the Melbourne Institute
16th Annual Statistical Report

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