A typical British two-parent family spends one third of their net income on childcare, therefore changes that affect people’s wealth are likely to impact on their demand for childcare. Government policies are particularly significant since much of the previous increases in childcare demand can be attributed to government policies. It is still too early to say with certainty if the long-run positive trend in female employment and demand for childcare has been interrupted and it is possible that it will take more time for people to adapt to Osborne’s budgetary measures. The reforms that have been implemented since 2010, many of which have been intensified by the Great Recession, have been largely negative for childcare demand.

The Fawcett Society reports that female long-term unemployment is at record highs, which may discourage women from trying to return to work. The upshot of male and female unemployment is likely to be a loss of household income and possibly cutting down on childcare use. Further, women make up around 65 percent of public servants, meaning they will be harder hit by public sector job cuts. The coalition government claimed that public sector job losses would be made up for by job opportunities in the private sector. This has not happened yet. Even if it had, though, women would be negatively affected since the gender pay gap is much smaller in the public sector.

There is a host of changes that affect childcare costs much more directly. The proportion of childcare costs that can be claimed under the Working Tax Credit (WTC) has been lowered from 80 to 70 percent. Child Benefit (CB) has been frozen for 3 years. The baby part of the Child Tax Credit (CTC) has been removed although the child element has increased. The increase in part-time employment implies the possibility that fewer parents will be able to claim the childcare element of the WTC by not fulfilling the working hours per week requirement. Additionally, this requirement has increased for couples with children as of April 2012. The Trade Union Congress has found that by 2015, the change of the indexation of the CTC from the Retail Price Index to the Consumer Price Index will lose a couple with children 300 pounds a year. My own calculations show that pregnant women and women with babies stand to lose the most from changes to CB, CTC, the Sure Start maternity grant, and the pregnancy health grant. A woman who is pregnant with her second child and her first child is still a baby, stood to lose 1283.36 pounds in 2011. A woman who has two children, one of which is a baby, may have lost over 870 pounds.

The importance of rising female employment in Europe in the past 30 years cannot be overstated. Women have been responsible for 25 percent of the increase in the wealth of lower- and middle-income families. Men have accounted for 8 percent. More women graduate university than men in most European countries. Most European cities experience skill shortages as the proportion of jobs requiring tertiary or upper secondary education is quickly rising. A lot of the skills that are essential in the knowledge economy are embodied in the female workforce and much of it is unused. A lack of affordable childcare limits women’s choices and access to full-time employment. Motherhood is associated with lower wages. Partly this wage penalty is accounted for by motherhood often resulting in fewer years of job experience and childcare can somewhat alleviate that problem by providing alternatives.

The Office for National Statistics reports that over 25 percent of families with dependent children are lone parent households while over 90 percent of lone parents are women. For lone parents, childcare enables employment and an income. The government has an economic and social responsibility to its citizens, and its policies should help and enable employment of people with dependent children. In the long-run such support would pay off in raised employment levels, economic growth, and tax revenue, as well as improved life choices and independence for women.

Creating perfectly equal choices for women would involve subsidised, full-time, good quality childcare from a young age. Some would argue that it would also ideally involve the same subsidy being offered to women who would prefer to stay at home to raise their children. This would acknowledge the value of unpaid care work that contributes to the economy’s human capital. However, in the face of rising female unemployment, supporting equality in the labour force is a priority.

Returning to formal childcare, studies have repeatedly shown that nursery education impacts on children’s future performance in school by preparing them, teaching English, and developing their social skills and this difference tends to persist in school. Both the duration and quality of nursery education are affected by austerity and the crisis. Studies also report lower drug use and crime rates and higher earnings by children who attended nursery. Good quality nursery education can work against negative influences in the home learning environment and is therefore all the more valuable.

Lower childcare use could slow down improvements in female empowerment and the road to gender equality. In the short-run, the loss of public sector jobs that has impacted on women more than on men, together with the fact that most new jobs are going to men will mean that the closing of the gender pay gap will slow. The same is true regarding the increases in female part-time employment. Part-time employment is associated with a pay penalty in addition to that experienced by women relative to men. Affordable childcare and female employment and empowerment should be a priority for the government. Especially in times when unemployment and rising living costs may be working against the expansion of childcare use. Lower-income families should be targeted in particular because they tend to use childcare less than middle- and higher-income families already. Additionally, poorer families often do not have sufficient networks of friends and relatives who would be able to provide informal care.