Putting the Child-Centred Investment Strategy to the Test: Evidence for the EU27

Abstract

Under the social investment paradigm, a child-centred investment strategy has been developed. The mainstay of such a strategy is the provision of childcare services, which are expected to increase maternal employment rates, further children's human capital and mitigate social inequalities in early life. In this article, I critically assess the child-centred investment strategy and question whether childcare services in European countries are, in their current state, up to the task of producing the anticipated benefits. The argument I develop is fairly simple: in order to be effective, childcare services should be provided for all social groups, and in particular for children from disadvantaged backgrounds. Drawing on recent EU-SILC data, I show that in all but one country this condition is not met: childcare services are often taken up at low or moderate levels, and children from low-income families use them to a much lesser extent than those from high-income families. In order to overcome these childcare deficits, countries should pursue a consistent investment strategy which entails increasing both the supply of childcare and employment opportunities for all social groups. This will require huge budgetary efforts for most member states.