Growth, equality and employment: investing in childcare in Scotland

The Scottish Government has made a commitment to double expenditure on childcare to 'increase the amount of free hours of childcare available to all 3-4 year olds and "vulnerable" 2 year olds from 15 to 30 hours per week (1,140 per year)' by 2021 (Davis et al. 2016). Existing studies focus mainly on the feasibility and the cost of that promise as well as incentives from the employment of parents. However, investment in the childcare sector also brings employment effects (especially for women) such as a direct effect (the number of people employed in the care sector); an indirect effect (increased demand of the care sector's suppliers) and an induced effect (increased household consumption as a result of higher employment). This paper explores how the proposed investment in the childcare sector can have positive direct, indirect and induced effects on employment, contributing to Scotland's economic growth. The analysis is primarily based on existing data for Scotland including the official input-output tables of the Scottish Government's Statistical Office.