Central Planning Bureau (CPB) and the Social and Cultural Planning Bureau (SCP) crack Cabinet plan Rutte-IV: insufficient incentive for labor force participation and negative impact on children

The government's plan to make child care largely free has not had the desired effect on parental labor force participation and has negative consequences for the development of children, conclude the Central Planning Bureau (CPB) and the Social and Cultural Planning Office (SCP).

The Rutte IV administration's ambitious plan to make child care largely free for working parents from 2027 and to pay the allowance be paid directly to childcare institutions, according to calculations by the planning agencies not to have the desired effect. The labor supply will increase only slightly by 0.2 percent (15,000 additional jobs). Middle- and high-income families already work a lot and parents with low-income are not incentivized to work more, since they are already currently receive 96 percent reimbursement.

Instead, the new system will lead to increased demand for child care, which the industry cannot keep up with. In the short lead to price increases, waiting lists and a decline in the quality of care. Especially low-income parents and their children will suffer suffer, as they will have to pay more than under the current system.

In addition, the plans have negative impacts on the child development and equity. Children with disadvantages often come from lower income groups and precisely they will not benefit from the cabinet's plan, because childcare for them will become more expensive and less accessible will become. This is worrying, since research has shown that precisely children who grow up in less favorable circumstances benefit a lot from childcare. childcare, for example to eliminate language deficits.

For these reasons, CPB and SCP recommend that the current proposals to be reconsidered. The social benefits of investing in child care lie primarily in child development and the promoting equity of opportunity, according to the planning agencies. It is therefore wise to modify the current cabinet plan.

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