Iceland spends a higher proportion of its GDP – nearly 1.8%, according to the OECD – on early childhood education and care than any other wealthy nation
Working parents need all the help they can get. Some countries provide it better than others.
Iceland, for example, is one of the best countries in the world for working parents, according to a new Bloomberg report that examines how state policies affect the quality and cost of childcare for working parents.
The country spends a higher percentage of its GDP — nearly 1.8 percent, according to the OECD — on early childhood education and care than any other wealthy nation, Bloomberg notes.
This level of investment helps make childcare relatively affordable in Iceland, where parents spend around 5% of their earnings on childcare on average, according to OECD data.
By comparison, the US spends just 0.3% of its GDP on early education and child care, and American parents, on average, spend about 19% of their earnings on child care costs, according to the OECD .
The report singled out the following five countries as standout examples of easing the financial burden on working parents:
- Iceland
- Estonia
- Germany
- Canada
- New Zealand
In the US, a widespread lack of child care and the rising cost of raising children are among the factors contributing to rising rates of burnout among parents. As a result, more parents have been forced out of the workforce since the start of the pandemic, either temporarily or permanently.
These problems exist everywhere to some degree, but some countries seem more committed than others to providing working parents with enough resources to ease this heavy burden.
Working parents with more resources at their disposal are more likely to stay in the workforce, according to a 2019 survey by the Center for American Progress.
Canada, for example, committed in 2021 to spend $22 billion over five years to reduce the cost of early education and child care. The country cited research showing that every dollar spent on early childhood education yields an economic return of up to $2.80, giving more parents the freedom to contribute to the workforce.
Likewise, Iceland’s policies that benefit working parents are one reason why the country has the highest female labor force participation rate among countries tracked by the OECD, according to Bloomberg.
More than 82% of adult women in Iceland are in the country’s labor force, according to the latest OECD data from 2021. This compares to just over 75% in Canada and about 68% in the US.
Most of the countries listed in the report have another important thing in common: they all offer strong childcare policies that make early childhood education and care widely available and affordable, if not free.
Children in Estonia aged between 18 months and 7 years are guaranteed a place in a childcare institution, while children in Germany are guaranteed a place up to primary school in the country’s ‘kita’ childcare programmes, which are free in some cities.
New Zealand is an exception in this respect: Its preschool programs are considered somewhat expensive for parents.
However, the country received high marks in the Bloomberg report for the quality of these programs, as well as a narrowing of the gender pay gap – to just 5%, according to PwC’s Women in Work Index – which benefits working mothers.
Source: CNBC
