Daycare does not lower “child poverty” or increase mothers’ labour force participation

Articles and Research by Kids First—Volume 4 (August 26 , 2005)

Daycare does not lower “child poverty” or increase mothers’ labour force participation

By Helen Ward, President, Kids First Parent Association of Canada ©

Daycare is promoted as the key to lowering “child poverty” because it will raise incomes by raising mothers’ Labour Market Participation. Is this true? What does the Canadian data tell us? Most mothers are in the Labour Force. But what does that mean?

(data from Early Childhood Education and Care in Canada 2004 published by the Child Care Resource and Research Unit at University of Toronto)

Are higher daycare expenditures associated with lower “child poverty” rates?

No: The lowest daycare expenditure provinces, Alberta and PEI, have among the lowest LICO rates for children.

Quebec spends far more on daycare than any other province ($1.56 billion, $4849 per government-regulated space) but at 16% does not have significantly lower Low Income Cut Off (LICO) rates.

Statistics Canada reports that cash “transfers mean fewer low income families” (Perspectives, Autumn 1996.) LICO rates would be lower if child care funding went to children rather than to “spaces” in daycare and related costs.

Less than 10 per cent of children 0-12 are in daycare.

In short, preferentially subsiding daycare for the few contributes to low income rates used to indicate child poverty. Putting this funding into Child Benefits has been shown to lower LICO rates for children; putting current daycare funding into Child Benefits would reduce LICO rates further.

Are higher daycare expenditures associated with higher Labour Force Participation Rates for mothers?

No. PEI has the second lowest daycare expenditure and the highest LFP rate. Alberta has the lowest daycare expenditure rate. Though Alberta’s LPF rate for mothers of children 0-2 is the lowest at 59.1%, the rate for mothers of children 6-15 is 83.7% , higher than high-daycare-expenditure Quebec’s for these mothers.

Are higher mothers’ labour force participation (LPF) rates associated with lower “child poverty” rates?

The theory is that the more mothers “work” the less poverty for their children: as LFP goes up LICO goes down. But this relationship is not established. High LPF and lower LICO are found only in PEI where daycare expenditures are also very low.


Policies intended to force mothers into jobs have the effect of pushing them into low-pay jobs. Few adults can manage the demands of a “good” higher-paying FT job, and/or job training, while raising children. So mothers become fodder for McJobs. This may not be a problem if there is a father around and in paid work, but for single mothers FT high-pay jobs are rarely do-able in reality. Married women couldn’t maintain being supermums with exciting well-paid FT career and active fuctioning family, and neither can single mums. Sacrificing parental attachment on the high alter of increased McJob “labour force attachment” by preferentially subsidizing daycare is not wise social or fiscal policy.

The Organization for Economic Cooperation and Development reports that higher daycare use is associated with a wider “wage gap” between men and women.

The costs of subsidizing daycare for single mothers with low-paying jobs are HIGHER than subsidizing parental care through welfare: True costs of daycare for two 3-5 yr olds and 1 school age child was $21,000 in 1999 based on costs reported in Building a Better Future for BC Kids. This figure is an underestimate because it excludes federal and municipal expenditures and all costs except operating costs. Fees would total about $1,450 ($600 x 2 age 3-5, $250 school age). The parent’s contribution after fee subsidies of $861/month (subsidies: $394 for each 3-5 yr old, $173 for grade 1-7) would be around $550/month or $6,600/yr. Welfare for a single parent family of 4 in BC is $915.58/month. So taxpayers are spending well over $15,000/yr to care for these children—over $5,000 more than would be spent on welfare for the whole family. Welfare rates in BC

Higher LFP rates appear as children grow older, but LICO doesn’t always drop. Though as children grow and mothers’ LFP rates increase, LICO rates for children are lowest for school age 6-12 year olds in only 6 of the provinces and not by very much. LICO rates are actually higher for school aged children in Ontario and New Brunswick than they are for 0-2 year olds. This contradicts the expectation that, because mothers of school age children will “work” more and bring in more money, LICO rates should be a lot lower for older children. But parents are quite aware that school age children need and benefit from parental connection and supervision, that’s why mothers’ LPF rates don’t rise much and LICO doesn’t always drop.

Most mothers are not working at full time jobs “outside the home” and do not want to. Part-time paid work is the preferred option. This fact is not reported.

Governments want us to be available for Full Time jobs. But Full Time jobs are not the preference of everyone or every parent.


LFP is often confused with “work”or “paid work” or “work outside the home”. Kids First recognizes that “every mother is a working mother”. Work is work.

Regarding paid work, mothers’ LFP exaggerates the impression that children are not with their parents. It says nothing at all about fathers’ activities. It is not a reliable indicator of what parents are actually doing. LPF rate includes:

  • full-time or part-time paid work done with children present, such as running an in-home daycare
  • part-time paid work—no minimum hours or pay
  • unpaid work in family farm or business—no minimum
  • looking for a job
  • being unemployed—on EI
  • being absent from a job – maternity and parental leave, vacations, lay-offs, family leave, etc

Low income is caused largely by looking after your own children and reducing LPF time spent acquiring money. Single income two-parent families have incomes about $20,000 lower than two-income families.

Helen Ward ©

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