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Title Analysis of Infant and Child Care Support

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Analysis of  Infant and Child Care Support
-Focusing on funding for infant and child care and education
Social Program Evaluation Division

  The government has since 2013 provided benefits to households in all income brackets with infants and children up to five years of age. These benefits are either (1) funds to help defray daycare costs or nursery fees or (2) home care allowances for children raised at home. The 2017 budget for  infant and child care is KRW 9 trillion 522.7 billion. This is 2.8 times higher than the 2011 budget of KRW 3 trillion 384.5 billion, which was before the eligibility for benefits was expanded to all income brackets. Concrete discussions are to begin in 2017 on the details of the pledges made by the 19th President of Korea, including the introduction of a children’s allowance, more funds for child care, and more funds to help defray education fees for preschoolers (3 to 5 years old). This report provides analysis of the child care policies that have been implemented to date, along with considerations for expansion of or changes to such policies.

  This report offers analysis on child care support policies based on empirical analysis of relevant statistics and government reports as well as interviews with child care experts and practitioners. The analysis primarily addresses the impact of child care and children's education benefits on people’s child-rearing expenditures, the sustainability of the funding for child care and nursery benefits, and the effectiveness of the home care allowance for households with infants and toddlers (0 to 24 months old.)

  These programs reduced households’ child-rearing expenditures in 2015 compared to 2011, showing that benefits for child care and nursery or pre-school have indeed reduced the financial burden on households. According to the analysis, each household’s annual child-rearing expenses per infant or child in 2015 were KRW 370 thousand lower than in 2011. Despite the effectiveness of the current child care program, improvements need to be made to ensure the sustainability of the program and to increase the actual benefits for families raising children. It would also be best to improve program efficiency and to ensure the sustainability of funding by addressing the discrepancy between the management of the infant and child care program and its funding. Households raising infants and children generally prefer to raise them at home instead of sending them to daycare, and the standard home care allowance is lower than the child care benefit. This means that families are not fully reimbursed for their child rearing expenses. Even though 65% of households with infants and very young children chose to care for their children at home in 2015, the average home care allowance per infant or child was about KRW 450 thousand lower than the average child care subsidy. This points to the need to make child rearing programs specifically for infants and very young children more effective, taking into consideration the current programs for providing child care costs and home care allowance. In short, complimentary measures, which are already under discussion, must be sought to adjust the current programs and render more substantial, balanced support to boost their effectiveness.

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