Childcare is a Big Deal

And it’s possible to treat it that way — check out what these countries are doing

This week we launched our new campaign, Momonomics, and if you’re a regular listener to the pod you know that our co-host Amanda Weinstein is an economist and a mom. Throughout this campaign we’ll feature Amanda in videos explaining how the economy works and host special guests like Sondra Goldschein, the Executive Director of the Campaign for a Family Friendly Economy on the pod. Listen to Sondra on this week’s episode. 

It’s no secret that the United States has never recognized care work as essential. 

In 2021, UNICEF Innocenti, a Global Office of Research and Foresight, released a report about where rich countries stand on childcare. Out of the 41 countries assessed, the United States ranked 40th. Luxembourg, Iceland, and Sweden were found to offer the best childcare policies.

So what are they doing differently?

In Luxembourg, the parental leave benefit is a game changer. This benefit offers full-time parental leave for a period of 4-6 months per child. Parents also have the option to take part-time parental leave or split the leave and benefit from partial parental leave. So if you work at least part-time, with the agreement of your employer, you can take part-time parental leave for 8 or 12 months and if you work full-time, you can reduce your work hours by 20% per week for 20 months.

Then there’s Iceland — a country that offers 6 months’ leave for both parents at 80% of pay – with 6 weeks extra to share between them. Also, childcare is heavily subsidized by the government. Iceland spends 1.7% of its gross domestic product on early-childhood education and care – more than double that of most other countries. That leaves Icelandic families spending only around 5% of their income on childcare.

By comparison, the U.S. spends just 0.3% of its GDP on early education and childcare, and U.S. parents, on average, spend roughly 19% of their earnings on childcare costs, according to the Organization for Economic Cooperation and Development (OECD).

Iceland’s policies benefiting working parents are one reason why the country has the highest female labor force participation rate among the countries tracked by the OECD. More than 82% of adult women in Iceland participate in the country’s workforce. That’s compared to roughly 68% in the U.S.

In Sweden they follow a dual-earner model, where policies support the equal sharing of work and childcare. Dual-earner countries are often characterized by extensive goals to integrate women into the labor market and to provide comprehensive support systems for working parents. This means that policies and laws support women’s labor market participation. Consequently, women’s labor market participation is high and family policies are generous, with state-supported childcare and parental leave for both parents. 

It’s been proven that accessible, affordable, and quality childcare helps parents return to work after parental leave, improves children’s social and cognitive development, and promotes a more gender equitable society. 

Governments have the power to help parents through paid parental leave, followed by affordable and high-quality childcare. But, that’s never going to happen if a government is run like a business, where profits are the only thing that matters.

That’s exactly why we launched Momonomics, a movement for anyone who believes that our government should be run like a family and should work for all families.