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Benefits of improved access to day care cancelled out by low pay trap

October 16, 2003

Mothers from socially disadvantaged families with access to good day care are more likely to take up paid work, but could actually see a reduction in their household income as a result, according to research published in today's British Medical Journal.

The study was the first randomised controlled trial of the effects of day care to be conducted in the UK. 120 families, including 143 children, took part in the study. Half had been randomly allocated a place at the Mapledene Early Years Centre (a Government-designated Early Excellence Centre) on the Holly Street Estate in the London Borough of Hackney while the remainder had agreed to provide data through questionnaires and in-depth interviews over an 18-month follow up period.

The findings indicated that 23% more women were in paid work among mothers using the day care centre than amongst those whose children were not allocated a place at the Centre. However, despite this effect of increased employment, there was no evidence of a corresponding increase in household income. Indeed, women entering paid employment often experienced a reduction in their entitlement to benefits such as Housing Benefit or Working Families Tax Credit on increasing their hours of paid work.

This supports findings of other studies which suggest that mothers' decisions to enter the labour market may not be motivated solely by immediate financial returns, but also by other factors including the need to maximise long-term earning potential, relief from full-time childcare and job satisfaction.

One of the report's authors, Tami Toroyan, Research Fellow in the London School of Hygiene & Tropical Medicine's Public Health Intervention Research Unit, says: 'This trial offers some support for government initiatives which have been developed in the belief that day care provision can increase a mother's take-up of employment opportunities. But our findings also indicate that paid employment does not provide an instant ticket out of poverty by increasing household income'.

The trial was carried out in the context of very high unmet demand for good quality day care places - a characteristic that persists in many boroughs like Hackney, despite increasing government investment in the area.

'Future anti-poverty strategies and policies, if they are to be successful, will need to place far greater emphasis on tackling low pay, addressing the benefit structure, and reducing the costs of day care to poor families', concludes Tami Toroyan.

The study was a collaborative project with expertise from the health, education and economic disciplines, including researchers from the London School of Hygiene & Tropical Medicine, the University of London Institute of Education, the City and Hackney Primary Care Trust and the University of East Anglia.

London School of Hygiene & Tropical Medicine (LSHTM)