The wage cost of a lack of access to affordable childcare in Aotearoa New Zealand

Lack of childcare means
many mothers cannot work.
Lost wages are high

Access to suitable and affordable childcare is a prerequisite for labour force participation for many mothers. We use data from the Growing Up in New Zealand longitudinal study to investigate how lack of access to childcare affects mothers’ work in Aotearoa New Zealand, a nation with high-quality but expensive childcare.

We find many mothers whose young children are not in childcare due to a lack of access report being prevented from working by childcare access issues. However, just over a fifth of mothers whose children are not in care due to access issues do work, and some mothers whose children are in care still report they are unable to work due to childcare issues.

By combining information on mothers’ work status and reasons for not working with earnings data for working mothers of young children, we estimate New Zealand mothers with children under age three who are not working only because they can’t access childcare may be foregoing $116 million or more of wages each year. 

Citation

Thomas Benison and Isabelle Sin. 2023. “The wage cost of a lack of access to affordable childcare in Aotearoa New Zealand". Motu Working Paper 23-02. Motu Economic and Public Policy Research. Wellington, New Zealand.

DOI: doi.org/10.29310/WP.2023.02