Is childcare holding children back?

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Why does the highest earning and most educated jurisdiction in Australia have relatively poor early childhood development outcomes? My dig into the data revealed an interesting possible cause.

Childcare and parenting has been a topic of regular interest to me, so it was great to have Dr Gigi Foster talk about her research on Australian childcare on episode 08 of the Human Ecology podcast. We explored the fundamental issues in the sector and how they can be resolved by rethinking our approach – Gigi proposed solutions that might cause bureaucratic heads to explode and require households to step back a touch from the rat race. The trouble is, we’re caught in a trap, and there’s no clear exit outside the Government handing over some control and the collective value shift that that could engender.

In preparing for the interview, I dug into Australian data on child development and what I found genuinely surprised me. I then looked at Census data and it suggested a possible explanation. What I found surprised me.

The worst state or territory for child development outcomes – measured at the age children enter school – is the Northern Territory. This is probably to be expected, given the relative disadvantage there.

But what really surprised me is that the second worst population is also the most advantaged – the most educated, highest income jurisdiction – the Australian Capital Territory (ACT). This was surprising because the ACT scored well in the Census in variables that you would expect would correlate well with childhood development – income and adult education levels. And yet the kids aren’t alright. So, what’s going on? 

Table 1 below was produced from the Australian Early Development Census, and shows the ACT is significantly behind on most indicators of early childhood development, compared with NSW and Victoria (I chose these two as comparators as they’re geographically close to the ACT, with similar proportion of the population being Indigenous, to control for entrenched Indigenous disadvantage. They also had some other variables that were comparable with the ACT, such as marriage rates and rates of couples with kids). The y-axis is percentage of kids entering school age, and the categories are, from left to right:

  • Physical health and wellbeing
  • Social competence
  • Emotional maturity
  • Language and cognitive skills (school-based)
  • Communication skills and general knowledge
  • Summary indicators (percentage ‘on track’ in all 5 indicators)

On physical health and wellbeing, 14% fewer kids in the ACT are on track compared to Victorian kids. Less than half ACT kids are on track in all five metrics, which is 19% fewer than NSW. And a really alarming comparison was for percentage of kids classed as ‘developmentally vulnerable’ for physical health and wellbeing in the ACT (13.8%) compared with NSW (9.2%) and Victoria (8.5%). This means there are 62% more ACT kids in this category than Victorian kids, and about 50% more than in NSW. ACT kids score worse than ‘kids with a language background other than English’ (LBOTE). LBOTE kids score higher than ACT kids on physical health and wellbeing (by 14%), social competence (marginally), emotional maturity (by 6%), and have fewer kids that are ‘developmentally vulnerable’ (by 29%). They score higher on the summary measure (48% to 43.8%). 

So, what’s the cause of this? I looked at Government data and one thing stuck out, which is that the ACT kids are spending too long in childcare and the parents too long at work. Here’s my evidence.

The 2021 Census data shows that the ACT scores really well on income, mortgage to income ratios, unemployment, marriage outcomes, education and labour market outcomes compared to NSW and Victoria. All are factors that should reduce childhood developmental issues. But now let’s look at the data on work in the ACT.

Examine the highlighted parts of Table 2 below, which depicts data for labour market outcomes. In the ACT, there are 50% more couple families where both adults work full-time, compared with NSW (row 2). There are 29% more couple families in the ACT where both adults work, compared to NSW (row 3). Of people aged 15 and over in the ACT, 66% work more than 34 hours per week, compared with 58% in NSW and 59% in Victoria (row 4). And 24% more people in the ACT do less than 15 hours of unpaid domestic work in the ACT, compared to NSW (row 5). 

In other words, in the ACT, people work a lot more and (likely) spend less time at home, compared with NSW (and Victoria, too). 

The rows that really stick out to me are row two (proportion where both in a couple are working full-time) and row three  (proportion where both in a couple are working). It is with these that the demands of work are most likely to have impacts on kids and where the difference between the ACT, and NSW and Victoria, are largest.

Looking now at childcare data, and I found some support for the theory that more time in childcare is a contributing factor to the detrimental developmental outcomes. 

While Federal Education Department data show:

  • average weekly hours in child care, per child, is higher in NSW (27.2), Victoria (28) than the ACT (25.8); and
  • ACT kids spend similar amounts of time to NSW and Victorian kids in centre-based child care settings…

…it also shows that there are a higher proportion of kids in the ACT being placed in childcare (Table 3). This includes a higher proportion in centre-based childcare and a lower proportion in family day care.

So, on the positive side, on a per child basis it looks like the ACT is doing better than NSW and Victoria in terms of fewer hours per day per child in childcare – which could reflect better commute times and more flexible work in the public service-heavy ACT population. Overall, though, the ACT seems to have more kids that are actually in childcare compared to NSW and Victoria. 

To summarise: families in the ACT work more, are home less, and are more likely to put their kids in childcare, compared with families in NSW and the ACT. The ACT has worse developmental outcomes than the two major states, and there doesn’t appear to be anything in the Census data that might explain the difference outside of work data (noting the limitations in the Census data with respect to explanations for childhood development outcomes). In fact, if anything, the Census data suggests the ACT kids should be doing better than their NSW and Victorian peers. And the difference is not exactly marginal – it seems significant, especially given the positive factors in the ACT. 

The data indicate where we are in terms of work, childcare, and outcomes. Lots of people working, lots of kids in childcare. Is this optimal? What would we change if we could?

This gets us back to Dr Foster’s points expressed in the episode: high quality care where close, one-on-one relationships are developed over time,  when these relationships and experiences are better than the counterfactual (how does childcare compare to the home environment), can be positive for children.

This returns us to the question of how to get better childcare and what would it look like for parents to be more involved? And for that you’ll have to listen to the episode.

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  • Matt is an economic policy analyst, former economics teacher and host of the Human Ecology podcast, which looks at the social, educational, philosophical and economic aspects of human flourishing in Australia. He's interested in educating Australians for freedom and promoting free and courageous thinking and inquiry. You can find him on X at x.com/mattsinglebrush.

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