“How public investments in childcare mitigate labour shortages and complement effectiveness of labour market policies in Europe”

Scholars have long argued that social policies affect people’s employment chances in interconnected ways, where a given policy intervention might have employment effects that are strengthened or dampened by other interventions. Contemporary welfare state researchers increasingly highlight the possibility that effects of one social policy may vary depending on other policies in place. An important example of such a possibility concerns two crucial policy interventions associated with “social investment” aspects of welfare states:  Active labor market policies (ALMP) providing job-relocation, training and other employment assistance; and Early-childhood Education and Care (ECEC) policies providing childcare or education assistance for pre-school children.  

In the first part of the talk I examine how public ECEC spending moderates post-childbirth employment attachment in Europe, and how this varies by gender, skill level, and country context. Analyses draw on longitudinal EU-SILC microdata for 26 countries (2003–2020).  Results show that while childbirth substantially reduces (female) employment probabilities, higher public ECEC investment mitigates this decline by supporting re-entry into employment, especially two years after childbirth. In the second part, I theorize and empirically assess how ECEC investments interact with ALMP in affecting individuals’ employment chances. The objective is to address scholarly controversy over whether this policy interaction entails complementarity, substitution, or non-interaction. Results show that ALMP and ECEC have complementary positive implications for employment probability among individuals with children. ALMP effort tends to have a more positive association with employment probability as ECEC effort becomes more substantial.

The contribution of my talk is threefold. First, I clarify the dynamics of female and male employment probability in the years after childbirth among individuals of prime working age in Europe. Second, I explore the moderating role of public investments in ECEC in shaping these dynamics for people of different skill levels and country contexts. Third, I analyse whether and to what extent national ECEC and ALMP efforts reinforce each other’s effectiveness in promoting employment chances among European families with children. Findings underscore the role of ECEC investment in sustaining labor force participation in Europe, and in increasing the effectiveness of other social investments such as ALMP. The broader objective of this talk is to contribute to the discussion of the complementary role of public ECEC and ALMP investments as part of a national policy among European societies to address social inequalities in employment chances and to meet the labour and skill demands of today’s knowledge economies.

Ilze Plavgo is Associate Professor of Economic Sociology and Public Policy at ESPOL, Université Catholique de Lille.