#191 £3.5Bn of Family Childcare

Intergenerational Audit

Each year the Resolution Foundation publishes an “intergenerational audit”. It looks at transfers between generations. This year’s has just been published

A Five-Minute Read

Last year the report dealt with the macro transfers between generations. (See Newsletter #100 "Its Not Fair”). It showed that as parents we are doing a good job. Wealth is being transferred down the generations at a huge rate. Older people are not blocking job opportunities for the young. As voters we are doing a less good job. There is a growing inequality. The young are supporting the old through pensions and healthcare more.

This year’s audit looks are specific transfers including time. The UK older generation has a major role in childcare. Last year they provided 776m hours of free childcare. That would have cost £3.5Bn to buy.

Grandparents Contribution to the Economy

Their contribution to the economy is much larger. They have enabled a dramatic increase in workforce participation by mothers. Especially those with young children. The numbers of mothers with pre-school children who work has grown. In the last three decades if has grown from forty-one percent to nearly seventy percent today. Women are now providing an increasing share of household income. They now contribute over a third up from twenty percent thirty years ago. The are now approaching the share contributed by married women without children who contribute forty-four percent of household income.

Women are working full time more. Men are taking a bigger share of bringing up children, but the bulk of care still falls on mother. The solution is childcare, which is being used much more. The percentage of households using childcare has grown. It is up to over sixty percent from only forty eight percent ten years ago. The share of household income taken by childcare has grown proportionally. In 2016 was sixteen percent. The bulk of the increase has come from families with pre-school children. Mothers are returning to work sooner.

The Grandparents Role

Grandparents are part of this story. There is a large “intergenerational transfer” of time. Twenty eight percent of grandmothers take care of their grandchildren. Only sixteen percent of grandfathers will help in this way. On average a grandmother will provide twelve hours of care a month, grandfathers less. Together they generate the 766m hours.

Family childcare is different. It is more important than the free healthcare offered by the Government. Mothers give in more credit for helping them get back to work. Perhaps this is because the Government scheme only applies to three- and four-year-olds. Perhaps it is because “family” will provide a more caring environment. Flexibility also seems to be important. It is most valued by parents working or studying non-standard hours.

Family childcare happens more often when parents are working. Grandparents seem to be most helpful when mother is working part time. If the mother is not working grandparents seem to help out more if she is looking for a job. Grandparents seem to take an economic view when deciding to help.

Not an Infinite Supply

The most surprising part of the report deals with the long-term trends. There are newspaper stories about grandparents time being exploited. The data does not support this idea. The “supply” has remained remarkably constant since 2005. The proportion of children being “minded” by their grandparents has remained constant. It has been around thirty percent throughout the period. Grandparents provided the same 8 hours per month throughout. Mothers are working more but grandparents are not increasing the help they offer. This is putting more pressure on other childcare providers.

There are multiple reasons. There were social and demographic forces that mean mothers want and are able to work. These same forces are constraining the supply of family childcare. Grandmothers themselves may be working far more than they did twenty years ago. More and more older people are working. Many will work beyond retirement age. Half of grandmothers were working in 2022 compared a quarter in 2005.

The age when people become a grandparent is increasing. Today people tend to become grandparents in their early sixties. The “age of first child” has gone up from 25 to over 30 in a generation. In the previous generation, a mother might have a daughter at 25. They might expect to become a grandmother in their early fifties. Far fewer of them were working so had time for childcare. Today grandmothers are older, perhaps less fit, but still more likely to work.

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