Parental Insurance and Childcare

The peer review was held on 19th and 20th April 2004 in Stockholm, Sweden, hosted jointly by the Ministry of Health and Social Affairs and the Ministry of Education and Science. In addition to the host country, eight peer countries participated in the discussions: Austria, Belgium, Finland, Germany, Hungary, Latvia, the Netherlands and the United Kingdom.

Parental Insurance and Childcare in Sweden

Parental insurance and high quality, affordable childcare are central to family-oriented policy in Sweden, aimed at supporting people in combining work and parenthood. The potential economic and social benefits deriving from such a policy are also acknowledged. The aim is to encourage both fathers and mothers to play their part in the upbringing of their children while maintaining their labour market attachment, and this requires an integrated approach of time-off from work combined with support for children while parents are in work. Although it is accommodated to the needs of the labour market, the policy in Sweden is also child-centred, with a strong emphasis on 'educare' for young children, which is seen as the first rung on the lifelong learning ladder.

The current approach has had a long development phase, with over 50 years' history of publicly-funded support. The comprehensive system in place today is financed by taxation and, in the case of parental insurance, with contributions from employers and those in work. All children from one year old have a right to a place in a pre-school and take-up is high, rising with the age of the child (compulsory school age is 7 years old); 90 per cent of 4-5 year olds participate in pre-school provision, for example. Responsibility for this provision rests primarily with the municipalities, though some pre-schools are run as co-operatives (usually by parents) on a not-for-profit basis, and all are covered by the same regulations regarding the quality of staff and premises, etc. Extensive out-of-school childcare provision for school age children is also delivered through 'leisure time centres' linked to schools. The opening hours of the childcare services take account of parents' working hours. Importantly, both pre-school and out-of-school childcare are covered by a means-tested maximum fee arrangement, limiting the amount payable by parents to a relatively low ceiling. For example, pre-school fees are limited, for the first child, to 3% of income (up to a maximum of SEK 1260 per month). For subsequent children the fees are lower (and always with an upper ceiling) up to the fourth child, for which there is no charge. In part, the maximum fee was introduced to avoid too much differentiation between municipalities, and to promote homogeneous standards of service provision (municipalities receive compensation from the central government for possible losses).

Parental leave arrangements are also extensive, with long duration compared with many other countries, and are paid at a high income replacement rate. In particular, leave covered by parental cash benefit can be taken for up to 480 days, and can be used until the child is 8 years old; 390 days are paid at 80% of previous income, and 90 days at a flat rate level of SEK 60 per day. Mothers and fathers have access to this leave, though take-up is mostly by mothers. In an effort to encourage more fathers to take time off, two fathers' months have been introduced that could only be taken by fathers and this appears to have increased their take-up. The existence of a high (even 100%) income replacement rate is seen as a crucial factor in encouraging fathers to take up parental leave.

Hence some Swedish collective agreements provide higher income replacement rates than 80% for parental leave. The range and quality of family policies that currently exist in Sweden are significant contributory factors to high employment rates for women and men, and a birth rate that is higher than the EU average.

Aspects of Transferability

There was considerable support for the Swedish approach among Peer Review participants, particularly with regard to the quality of pre-school provision (ensured through high staff/child ratios, high levels of education among staff, and a rigorous quality inspection system) and the generosity of the parental leave arrangements. In some peer countries (eg Finland), it was felt that their systems had similarities with Sweden in their approach to childcare and parental leave, though few were able to match the levels of provision. In some other countries (eg Germany, Austria) the general policy approach was clearly different, with some still following the full-time 'male breadwinner model', where support is delivered mainly through allowances and the tax system, and is not linked to labour market participation. In such countries, it was argued that significant changes in social norms with regard to gender roles would be required, in order to implement the Swedish approach. Most peer country representatives were, however, impressed with the measures to encourage greater participation of fathers in bringing up their children and felt that this could and should be enhanced in their countries, although the way in which this might be implemented would vary between countries.

Participating independent experts

• Margareta KREIMER

  Austria
  University of Graz
• Stephanie DEVISSCHER

  Belgium
  IDEA Consult
• Hanna SUTELA

  Finland
  Statistics Finland
• Friederike MAIER

  Germany
  Berlin School of Economics
• Eva FODOR

  Hungary
  Central European University
• Vyacheslav DOMBROVSKY

  Latvia
  BICEPS
• Anita NYBERG

  Sweden
  Swedish National Institute for Working Life
• Alexandra VAN SELM

  The Netherlands
  ECORYS-NEI
• Hilary METCALF

  United Kingdom
  National Institute of Economic and Social Research