Outline:
Understanding Childcare Costs Across Europe
Childcare is a critical aspect of early childhood education and care, which plays a vital role in shaping a child’s future. It not only influences academic success but also impacts long-term career opportunities and overall life outcomes. In many European countries, the cost of childcare remains a significant financial challenge for families. While some nations provide robust support systems, others leave parents to bear a substantial portion of these expenses.
The variations in childcare costs across Europe are influenced by several factors, including government policies, public funding, and the structure of the childcare system. The Organisation for Economic Co-operation and Development (OECD) provides data that helps understand how much families pay for childcare before and after benefits, as well as what percentage of their income goes towards these services.
What Do Childcare Cost and Benefit Data Cover?
Childcare costs and benefits vary significantly across Europe. The data typically covers centre-based care, which refers to childcare provided outside the home in licensed facilities. These include nurseries, day-care centres, crèches, playschools, and parent-run groups, which may be offered on a full-time or part-time basis.
For families with two children aged two and three, the OECD collects data on net childcare costs. This includes total gross fees minus childcare benefits, adjusted for changes in taxes and other benefits. Gross childcare costs refer to the charges to parents after public subsidies to providers, but before any discounts based on family circumstances.
Gross Childcare Costs in Different Countries
As of 2023, the gross childcare costs for two children in the EU range from €552 in Germany to €39,229 in the Netherlands per year. Including EFTA countries and the UK, Switzerland tops the list at €64,211. Other countries with high costs include Luxembourg (€30,254), the UK (€27,071 or £23,546), and Ireland (€20,533).
In contrast, the lowest costs are found in Germany (€552), with several other countries falling under €2,000. These include Bulgaria (€884), Hungary (€1,007), Austria (€1,638), Czechia (€1,843), Croatia (€1,911), Lithuania (€1,935), and Romania (€1,945).
Among Europe’s five largest economies, the UK has the highest childcare costs, while Germany is the cheapest. Italy (€10,032) is also costly, France is mid-range at €7,717, and Spain has the second lowest of the five at €2,452.
Net Childcare Costs Based on Family Income and Earners
Net childcare costs depend on whether families have one or two earners. Childcare support varies by income level and number of earners. Single parents and one-earner families usually receive more assistance than two-earner couples.
In some countries, both types of families pay the same, usually where childcare costs are lower—often under €2,000. However, when childcare costs are high, the difference between single- and two-earner families becomes significant, as seen in Switzerland, the Netherlands, France, Belgium, and Cyprus.
For single earner families, net childcare costs range from zero in Greece, Italy, and Malta to €10,200 in Switzerland, followed by the UK (€9,991 or £8,690) and Ireland (€8,409). The Netherlands (€6,563), Belgium (€5,524), Finland (€4,539), and Norway (€4,177) complete the top seven most expensive.
For two-earner households, net childcare costs rise significantly in many countries. Switzerland remains the most expensive at €27,551, followed by the Netherlands (€15,915). Costs also exceed €10,000 in the UK (€13,662 or £11,848), Ireland (€13,056), and Belgium (€11,186).
Percentage of Salaries Spent on Childcare
The most important indicator in understanding the affordability of nurseries and comparing countries is looking at what percentage of salaries go towards net childcare costs.
The UK has the lowest share at 18%, followed by Slovakia (17%) for single parents or one-earner families. In five more countries, it reaches 10% or higher: Ireland (14%), Czechia (12%), the Netherlands and Romania (11% each), and Switzerland (10%).
Romania ranks sixth by share of income, but only 14th in nominal costs (€1,945). This shows that lower average wages increase the burden on households.
In most European countries, this share is 6% and below, including Germany (1%) and France (6%). For two-earner couples with two children, it ranges from zero in Malta, Bulgaria, and Italy to 28% in Switzerland. In Cyprus and the Netherlands (26% each) and the UK (25%), at least a quarter of household income goes to childcare.
Variations Based on Income Level
Costs and shares vary by income level. While benefits usually increase when households earn below the average wage, the share of income spent on childcare often rises. In Ireland, a single earner on 67% of the average wage spends 19%, compared with spending 14% at 100% of the average wage.
Two-earner couples, when both earn the average wage, spend 22% of their pay on childcare. This rises to 25% when one parent is on 67% of the average wage and the other is on minimum wage.
Why Are Childcare Costs Low in Germany But High in the UK?
According to Michael Fuchs, senior researcher at the European Centre for Social Welfare Policy and Research, the very low percentage in Germany (similar to Austria) results from the effect that gross childcare costs are very low on average. In Austria—and likely in Germany—gross childcare costs are low because most public institutions charge no fees. In Austria, for example, crèche and kindergarten are free, with only lunch costs to be paid.
In contrast, in the UK, gross childcare costs are very high given the widespread private market. This highlights the significant differences in childcare systems across Europe and the impact they have on families.