Sarah is an Associate Director in the Education and Skills sector. She joined the IFS in 2012 and currently holds a British Academy Postdoctoral Fellowship to study child development and household behaviour in developed and developing countries. Sarah’s research interests include the origins of inequality and the role of human capital played in driving inequalities within and across generations. In the recent past, she has conducted projects looking at the determinants of early childhood development, the impact of early childhood and education policies, and the gender wage gap.
More hours, more children, and more spending: early years and childcare proposals from Labour and the Liberal Democrats
As part of its proposal to create a National Education Service, the Labour party has put forward plans to dramatically increase and reform childcare subsidies in England. Taken together, these changes would transform the childcare system in England: extending access to free childcare to more and younger children, introducing subsidies for additional hours of care, and transitioning from a system in which subsidies are given to parents to a system of direct government subsidy. These proposals are costly: Labour anticipates that it will spend an additional £5.3 billion on the early years in 2021-22, 70% more than under current projections, and the long-run costs might be higher yet. There is a case for subsidising childcare to support children’s development and parents’ employment, particularly as Labour plans to invest in high-quality places. However, available evidence from the UK suggests that these benefits will be comparatively small. Both sides of the policy coin – benefit and cost – will depend on the take-up rates of these extended entitlements; however, there is a great deal of uncertainty about what a realistic estimate might be.