The impact of alternative childcare policies on mothers’ employment in selected EU countries

Abstract

Abstract In 2022, the European Council raised the commonly known Barcelona target on childcare provisions established in2002 that, by 2010, a minimum of 33% of children below the age of three should receive early childhood educationand care with specific. The recent recommendation stipulates that by 2030 a minimum of 45% of children belowthe age of three should receive early childhood education and care. This paper analysis the labour supply effects ofhypothetical formal childcare provision targets (40%, 50%, 60% and 65% of children below the age of three) in aset of EU Member States based on the behavioural microsimulation model EUROLAB. Our findings indicate thatachieving these targets would result in an overall increase in the labor force participation of mothers, with variationsacross countries. We show that in countries like Hungary and Poland, where the current levels of formal childcareand female labor participation are low, the expected impact on labor supply incentives is likely to be substantial.Conversely, in countries like Portugal, which already exceed the existing childcare target of 33%, the changes in laborsupply incentives are moderate for the highest targets. These results indicate that a universal, one-size-fits-all targetsmay not be efficient in the EU, given significant variations across countries in terms of labor market participation andchildcare systems. JEL-Code: J20, J22, J23, J13