Simulating employment and fiscal effects of public investment in high-quality universal childcare in the UK

International Journal of Child Care and Education Policy

Table 9 Distributional results by decile group and household type for Scenario 3

	Childcare (%)	Earnings (%)	Tax (%)	Total (%)
Income decile group
D1 (lowest)	0.6	29.4	− 0.4	29.6
D2	0.1	4.7	− 0.2	4.7
D3	0.3	3.7	− 0.4	3.5
D4	0.4	2.4	− 0.6	2.2
D5	0.8	1.2	− 0.7	1.4
D6	0.7	1.2	− 0.7	1.2
D7	0.8	1.0	− 0.8	1.0
D8	0.9	1.3	− 0.9	1.3
D9	0.8	0.8	− 1.0	0.6
D10 (highest)	1.1	0.8	− 1.6	0.3
Household type
Single woman	0.0	1.9	− 0.8	1.1
Single man	0.0	2.5	− 1.0	1.5
Couple no child	0.0	0.6	− 1.2	− 0.6
Lone mother	3.0	3.7	− 0.5	6.1
Lone father	1.1	0.0	− 0.9	0.2
Couple with child	2.5	4.0	− 1.3	5.2
Single woman pensioner	0.0	− 0.1	− 0.3	− 0.4
Single man pensioner	0.0	0.0	− 0.3	− 0.3
Couple pensioner	0.0	0.0	− 0.4	− 0.4
All households	0.8	1.8	− 1.0	1.7

Source: own calculations using UKMOD microsimulation tool. Decile groups are established based on ranking equivalised household disposable incomes prior to the reform. ‘Childcare’ is the effect of making all childcare expenses free for those with children aged 0–4, relative to disposable income of the household after childcare costs in the baseline pre-reform scenario. ‘Earnings’ is the effect of increased employment and earnings as a result of the reform, relative to the same baseline income after childcare. ‘Tax’ is the effect of raising SSCs and lowering PA to pay for the shortfall, and ‘Total’ is the sum of the three components giving the overall net contribution (−) or benefit ( +) of the reform