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Review of Working Conditions for Staff in Early Learning and Care

International Comparisons of Fees, Staff Wages and Public Investment in Early Learning and Care

November 24, 2020

On November 13, the Department of Children, Equality, Disability, Integration and Youth (DCEDIY) published the first suite of research commissioned to support the development of a new funding model. Five papers were produced by Frontier Economics. This week, The Big Picture summarises and comments on Working Paper 1.

The aim of the paper is to assess the extent to which Early Learning and Care and School Age Childcare (ELC/SAC) provision in Ireland can be characterised as having high fees, low wages and low levels of public investment, by reviewing the international evidence. Although the scope for the work originally included School Age Childcare, the report focuses exclusively on Early Learning and Care due to data availability.

First, the authors conclude that parents in Ireland pay some of the highest costs for Early Learning and Care relative to the average national wage across a broad range of European and OECD countries. The international evidence indicates that the high costs might be linked to the absence of fee regulations. However, it is highlighted that the extent to which high costs for parents are driven by low levels of public support in the form of fee regulation and supply-side subsidies cannot be determined, given the absence of comparative statistics for delivery costs.

Second, the main conclusions regarding workforce wages are the following: in terms of absolute levels, average earnings for the Early Learning and Care workforce in Ireland are at the lower end of the international distribution but are not among the very lowest; and in terms of earnings relative to the national average, Ireland has the lowest relative pay of all the countries considered. Third, the authors conclude that it is not possible to draw any conclusion on whether public funding on Early Learning and Care is low in Ireland relative to other countries due to data issues.

Given the key role of this research to inform policymaking, we believe that the paper would benefit from a peer-reviewing process. Subjecting a piece of research to the scrutiny of other experts in the field is common scientific practice, to ensure that the work is robust. We believe that a few points deserve further attention. Early Childhood Ireland believes that there is sound evidence that the Irish government is among the lowest spenders in the developed world. All databases are imperfect measures of reality – especially those that collate information at an international level about a system that is structured very differently in each country. That does not mean that they do not produce valid approximations. Specifically, the OECD public spending database is criticised for containing only spending relative to the Early Childhood Care and Education (ECCE) Scheme, for using GDP, which is the usual way public spending is measured and for being relatively outdated. It is argued that those factors contributed to the misrepresentation of the Irish position for the following reasons: other areas of public spending were not included; the GDP measure overstated the level of income accruing to residents, and spending increases that happened in recent years were not factored in. However, a simple exercise that corrects these potential biases by using national budget data and by using a measurement called ‘GNI*’ shows that in 2019 Ireland spent only about 0.3% in Early Learning and Care/School Age Childcare – which still places Ireland among the lowest investors in the OECD.

Therefore, it is reasonable to assume that high costs for parents are largely driven by the lack of adequate public investment. Although there are no international statistics on delivery costs, it is unlikely that high delivery costs are the driver of high costs for parents in Ireland. As the report itself later concludes, wages in Ireland are very low. And wages represent the bulk of delivery costs.

Finally, there are technical weaknesses in wage analysis. First, the comparison of absolute salaries is not very informative, as it does not consider the standard of living in each country. Second, the assumption that data for teachers is representative of practitioners more broadly is too unrealistic as there are stark variations between the salaries of room leaders and assistants. The latter are often in much more precarious work arrangements than the former. Third, the Irish figures are based on a 52-week work year, when it is widely acknowledged that many Early Learning and Care staff are employed on 38-week contracts. Therefore, the conclusion that Irish wages “are not among the very lowest” may be misleading.

Early Childhood Ireland will continue to analyse these reports in the coming weeks and months.

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