Reducing Inequalities by Investing in Early Childhood Education and Care

Inequalities in early childhood stem from many sources, from the availability and quality of prenatal care to parental income, the adequacy of housing and the opportunities children are provided to form stable and meaningful relationships (OECD, 2019[1]). These various sources of inequalities compound, entrenching opportunity gaps very early on in life (see Chapter 3). Given the intersectoral nature of these opportunity gaps and the inequalities that underpin them, numerous policy areas play an important role in supporting equity in early childhood, including ECEC policies. Although the focus of this report is on achieving more equal opportunities and inclusion through ECEC in particular, ECEC does not operate in isolation – understanding its connections to related policies that can also address early inequalities is vital for optimising early childhood investments and outcomes.

The range of policy approaches presented in this chapter are intended to illustrate how various systems and services are organised around specific areas of support for children and families, situating ECEC among them. The overarching questions addressed are:

• What policy areas are essential for supporting families with young children, and how can this range of policy areas support maximising the contributions of ECEC in promoting equal opportunities and inclusion in early childhood?

• What does policy and programme co-ordination and integration mean in the early childhood space?

This chapter addresses these questions by mapping key policy areas that can contribute to better and more equal opportunities for young children and their families, or conversely, that can lead to the structures that maintain and entrench inequalities. Drawing on these policy domains, the chapter outlines various approaches to co-ordinating comprehensive services in early childhood. It concludes by outlining the potential and limitations of ECEC policies for encouraging co-ordination and integration of early childhood programmes and policies.

This section describes a range of policies that interact with ECEC, or that can be provided alongside ECEC, as shown in Figure 4.1. First, a range of models for providing ECEC services is described. Next, other initiatives and policy areas are considered with respect to both a developmental perspective (i.e. changing needs from birth to school entry) and a proximity-to-the-child perspective, with ECEC and programmes targeting children’s homes and families considered the most proximal, and more general social programmes for vulnerable individuals as less proximal. The goal is to highlight the complex governance structures and a range of policies that matter for early inequalities, and that therefore matter for how ECEC is and can be instrumental in addressing these inequalities.

Beyond working across the traditional sectors identified in Figure 4.1, early childhood policies are developed and implemented at multiple levels of governance, from local to national. ECEC policies, when compared with other levels of education systems, tend to be highly decentralised, with significant authority at local levels (OECD, 2017[2]). This arrangement can be beneficial for ensuring policies and programmes are responsive to local communities, but also amplifies the risk of duplicated and competing efforts, as well as potentially creating confusion among families regarding available benefits and services. For these reasons, understanding the full landscape of policies related to early inequalities is critical for situating ECEC among these related efforts and investments.

The OECD and other international organisations continue to advocate for a whole-of-government approach to support vulnerable youth and children, with some of them noting that without an overarching authority to manage co-ordination across governance silos, policies risk competing with or duplicating one another instead of addressing complex needs (OECD, 2017[3]; WHO, 2018[4]; OECD, 2023[5]; OECD, 2021[6]; Dirwan and Thévenon, 2023[7]). The potential for innovation in ECEC policies to strategically connect with other policy areas to reinforce a whole-of-government focus on child development is explored further in Chapter 10.

ECEC itself encompasses a wide range of services, which operate under different degrees of formality and regulation, and have different objectives. The types of ECEC programmes available across OECD countries differ due to variations in the modes of provision and the degree of system fragmentation (OECD, 2020[8]; OECD, 2020[9]) (Figure 4.2). In terms of regulated ECEC settings, policies cover different types of programmes – based in homes, centres and schools – and also distinguish programmes with and without formal educational goals and for children of different ages, as indicated through their categorisation in the International Standard Classification of Education (ISCED). ISCED is an instrument for compiling statistics on education internationally, with ISCED Level 0 encompassing early childhood education. In some countries, parts of the ECEC system may be considered to fall outside of the ISCED classification scheme, for instance if considered primarily childcare rather than a starting point of the education system. Unregulated ECEC arrangements, such as individuals hired directly by a family or care provided by extended family members or neighbours, are also common. This chapter, however, focuses on the types of ECEC that are regulated, which can vary across countries (Figure 4.2).

Given that young children learn through caring and responsive relationships, the separation of “care” and “education” is increasingly understood as a false dichotomy (OECD, 2020[8]; OECD, 2021[11]). However, a historical split in some ECEC systems reflects different policy goals for ECEC: on the one hand, ECEC is a mechanism to support parental labour force participation and on the other hand, it is an opportunity to provide children with enriching experiences. Depending upon these different policy intents, regulations for ECEC programmes vary in terms of key features, like the presence of explicit curricular goals or the level and type of education and training of the workforce (see Chapter 6). These divisions are sometimes reflected in the governance structures of the ECEC system. Split ECEC systems are those in which different ministries have authority for different segments of provision, in contrast to integrated ECEC systems in which all regulated components of ECEC fall under the responsibility of a single ministry. Split ECEC systems are often a result of different policy priorities for different ages of children, with care and the economic goal of parental labour force participation typically taking precedence for very young children, particularly from ages 0 to 2.

Although these classifications for split governance are a common way to describe ECEC systems (OECD, 2001[12]; OECD, 2017[3]), divisions within ECEC organisation and oversight can be significantly more complex. For example, in many countries, the private sector is growing or already large (OECD, 2023[13]), often with for-profit institutions controlling a key market segment (see Chapter 9). Furthermore, different types of ECEC programmes may have different governance, regardless of whether the system is overall split or integrated. This can occur when home-based settings are regulated differently from centre- or school-based settings, or when certain programmes or initiatives are governed at a regional or national level (e.g. school-based settings), while others are under local or municipal control (e.g. centre-based settings). The very broad range of ECEC programmes available can be challenging for families to navigate, as they seek to match available places with their own goals and preferences for early education and care (see Chapter 5). In addition, the various splits in ECEC systems create transition points for children that have the potential to exacerbate early inequalities (OECD, 2017[3]).

In addition to providing opportunities for children to learn and explore, ECEC offers opportunities to identify children with emerging developmental delays (i.e. those who are not reaching expected developmental milestones but who may not have or need a formal diagnosis) and to support children with specific disabilities and diverse learning needs through early intervention strategies (see Chapter 7). Early intervention is a broad term that refers to programmes and services, including ECEC, intended to address areas of vulnerability for young children. It encompasses the diverse needs of children, including specific learning support needs arising from individual characteristics as well as developmental needs that may be time-limited. High-quality ECEC that recognises the diverse needs of children can itself be an effective early intervention strategy (see Chapter 6), but within ECEC settings, more specific strategies can support children in more targeted ways (see Chapter 7). Inclusion policies that permit children with different needs and abilities to be integrated in settings with their typically-developing peers and the use of individualised education plans to support this integration are common strategies that are receiving growing attention. Every child develops and learns differently, and thus strategies that respond to children’s diverse needs are critical in ECEC; expanding this understanding to encompass children with developmental delays as well as formally diagnosed developmental or other disabilities is important for creating more equitable opportunities (UNESCO and UNICEF, 2024[14]).

Independent of to what extent ECEC programmes are designed with the specific intention of encouraging parental labour market participation or to provide children with enriching experiences, they may also have goals around parental engagement with the programme or connected services. These goals can be related to supporting children’s development, learning and well-being by building connections between the home and ECEC setting, or they may be centred on parents themselves. These types of initiatives reflect a social function of ECEC, which can be considered a third potential goal of ECEC policies, in addition to the economic and education goals already noted (Tobin, Arzubiaga and Adair, 2013[15]; Vandenbroeck, 2006[16]; Vesely and Ginsberg, 2011[17]). Such initiatives need not be intrinsically associated with ECEC, but ECEC settings can provide a convenient way to connect with families on a range of topics, from children’s health and preventative care to facilitating connections with and knowledge about the school system and more. For some families, ECEC programmes that are explicitly designed to welcome both children and parents can be more appealing than settings where parents are expected to separate from their young children for extended periods of the day (Shuey and Leventhal, 2020[18]).

Parents have a profound influence on their young children (see Chapter 3). Thus, another strategy for reducing inequalities in early childhood is to support parents in their roles as caregivers and resources for early learning experiences. Programmes for parents can focus broadly on promoting positive parent-child relationships, or can have more specific goals, such as supporting parents’ mental health, increasing home literacy activities or improving parents’ knowledge of nutrition and healthy eating (Riding et al., 2021[19]). Evidence reviews of these different types of programmes suggest that all interventions are not created equal, as some programmes fail to demonstrate benefits and others sustain changes to parents’ behaviours only over a short period of time (Barone et al., 2019[20]; Bierman, Morris and Abenavoli, 2017[21]; Duncan et al., 2022[22]). Nonetheless, parenting can be responsive to interventions, with meaningful impacts for children, when programmes target specific skills, provide parents with additional resources and are delivered by trained staff (Magnuson and Schindler, 2016[23]; Moran, Ghate and Van Der Merwe, 2004[24]). Furthermore, these programmes can have spill-over effects on parent well-being and mental health while also supporting parenting skills (Lindsay, Strand and Davis, 2011[25]).

Still, these programmes often face many of the same barriers for entry and consistent participation that are relevant for children’s enrolment in ECEC (see Chapter 5). For these reasons, interventions that require relatively low levels of resources and limited time investments from parents are increasingly of interest. Several efforts to increase early literacy skills using digital tools (e.g. text messaging) show promising results for both the time parents spend reading with their children and children’s emergent skills, including among vulnerable families (Barone, Fougère and Martel, 2024[26]; Mayer et al., 2018[27]; York and Loeb, 2018[28]).

Programmes and policies can also support parents as children enter ECEC for the first time, and these efforts may be targeted to families who face specific barriers to ECEC participation or have lower average enrolment rates, such as lower-income families or those with migrant backgrounds (Box 4.1. and Chapter 5). Transitioning into ECEC is a milestone for children and families alike. The changes that accompany this transition naturally induce stress for children, which is mitigated by high-quality adult-child relationships (Ahnert et al., 2022[29]). Parents as well are likely to experience stress at these transition moments, which ECEC programmes and policies are well-placed to help address (Cardenas and Colwell, 2022[30]). To the extent that ECEC settings can adapt to children and families, including through learning about the family and their culture and expectations, transitions into ECEC can be smoother.

Home visiting is another important strategy to support equitable and ready access to general health and mental health services, as well as parenting information, child development information and supports around birth that can help mitigate disadvantages. These programmes involve trained professionals such as community health nurses, social workers, or educators visiting families in their homes to provide tailored, needs-based assistance (Riding et al., 2021[19]). Home visiting programmes have been implemented in various formats across OECD countries.

Home visiting programmes generally begin prenatally, taking a predominantly public-health-oriented perspective to supporting pregnancy outcomes and preparing parents to welcome a newborn in the household. In this model, home visiting can also be an enabler of future enrolment in ECEC by educating parents about the options that are available to them and connecting families to relevant resources in their communities more broadly (Duffee et al., 2017[36]). Many home visiting programmes are also intended to reduce the risk of child maltreatment in families with particular risk factors (e.g. teenage parents, families in poverty), and evidence indicates that with careful implementation, home visiting can deliver on this goal (Gubbels et al., 2021[37]). Moreover, home visiting can serve as a protective mechanism by improving mental health outcomes for parents and enhancing family cohesion, thus promoting a safe and nurturing environment for children (Reuter, Melchior and Brink, 2016[38]). Notably, even when offered universally, the constellation of services proposed to families through home visiting services can be tailored to offer more targeted interventions to families with the greatest levels of need (Dodge et al., 2013[39]; OECD, 2015[40]).

Home visiting can also be connected to ECEC programmes, giving emphasis to building strong links between the home environment and ECEC. In this approach, ECEC staff – or even parent peers (Nathans, Nievar and Tucker, 2019[41]) – visit families at home to provide home learning materials and strategies for parents to use to engage with their young children. For ECEC staff, this is also an opportunity to learn about the family and understand their goals and potential constraints around participation in ECEC. This approach can be another way to support transitions, including the first entry into ECEC, but also between ECEC programmes or into primary school (OECD, 2017[3]).

Community-based birth support is a related type of service provision that is focused particularly on the prenatal and early post-partum periods. Practitioners in this model can come from a wide range of disciplinary backgrounds and act with a main goal of supporting pregnant people to navigate complex health and social service systems; this model is generally oriented towards supporting historically marginalised groups. Community-based support workers meet with families and accompany them in a variety of settings, such as through home visits as well as participation in medical appointments. Evidence suggests this service model can be highly valuable in helping families access needed services (e.g. childbirth education, paediatric appointments), promoting child health and establishing positive parent-infant relationships (Prenatal-to-3 Policy Impact Center, 2023[42]).

Continuous access to primary medical care in the early years can reduce health risks associated with socio-economic disadvantage and ensure children remain on a healthy developmental trajectory. Evidence shows that implementing free and accessible medical services for families with young children can improve their long-term health and contribute to better educational and professional outcomes in adulthood, particularly benefiting low-income groups (Bütikofer, Løken and Salvanes, 2019[43]). Medical services can also serve as a medium to identify and address factors that may pose a threat to healthy child development, such as poverty and maltreatment, as well as track developmental progress to identify young children who may have or be at risk for delays or disabilities. In these cases, primary medical care staff can refer families to relevant social services that are vital to prevent adversities and improve conditions for better development pathways (Burley et al., 2022[44]). For example, low-income children are at elevated risk of tooth decay and ear infections, both of which are associated with poorer academic and psycho-social outcomes (Guarnizo-Herreño, Lyu and Wehby, 2019[45]; Wang et al., 2021[46]). Evidence shows that providing information, screening and referral services to families in ECEC settings can promote children’s health in their early years (Martin and Karoly, 2016[47]).

Initiatives that integrate health, nutrition and physical activity programmes into ECEC settings play a significant role in responding to health inequalities. For some children, particularly those from lower socio-economic backgrounds, school meals represent an important source of daily nutrition (OECD, 2023[48]). Quality food support provided in schools and ECEC settings can therefore buffer the health risks that result from poor nutrition and enhance educational outcomes, particularly for socio-economically disadvantaged children (Belot and James, 2011[49]). Modelling and promoting healthy eating habits and lifestyle choices is another benefit of combining nutrition and ECEC policies (Yoong et al., 2023[50]). Providing parent training as part of these initiatives can increase parent knowledge about nutrition and health, build parenting skills around healthy eating and exercising, facilitating healthy and active lifestyles in the home environment as well (Hingle et al., 2010[51]). These programmes can contribute to overall child health and play a significant role in reducing the adverse effects of infections in early years (Dewey and Mayers, 2011[52]).

Parental leave accommodates various needs of parents to take time off from work to care for their children. The most common form precedes and follows childbirth to support parents in the last phases of pregnancy and allow them to cater to the needs of their infants. Infancy is a period that requires continuous responsiveness, warmth and supervision from caregivers. To meet the high demands of this developmental stage, all OECD countries, except the United States, offer nation-wide paid leave entitlements for primary carers. Additional parental leave options are typically available to either mothers or fathers or to be shared across parents; these types of leave may be paid for a certain period, with possibilities for unpaid extensions (OECD Family Database, 2024).

Paid parental leave, as a widely recognised family support policy, offers multiple benefits to families as well as society at large such as enhancing fertility rates in ageing societies, especially when combined with generous family benefits (Thomas et al., 2022[56]; Adema, Clarke and Frey, 2015[57]). However, these benefits may entail trade-offs that require careful policy design. For example, paid parental leave during the first six months is linked to improved mental and physical health outcomes for both parents and children, whereas the added benefits beyond this period have been shown to be minimal (Heshmati, Honkaniemi and Juárez, 2023[58]; Canaan et al., 2022[59]).

One such trade-off is its impact on maternal employment. While paid leave can facilitate women’s re-entry into the labour market, extending leave beyond six months can negatively impact wages and long-term employment prospects (Canaan et al., 2022[59]). A review of studies with causal evidence has found either positive or neutral impacts of maternal work on children’s outcomes, indicating that maternal employment following childbirth does not inherently compromise child development (Lo Bue, Perova and Reynolds, 2023[60]). Parental leave policies that involve both mothers and fathers can promote gender equality and further enhance women’s employment outcomes, but these policies may be ineffective without gender-balancing incentives (OECD, 2023[61]).

Despite the significant benefits of well-designed family leave, low-income families are less likely to benefit from these entitlements due to the types of jobs they disproportionately hold (e.g. self-employed, limited working hours) and because the income replacement schemes may be too limited to enable them to remain out of the workforce for the full period of entitlement (Margolis et al., 2018[62]). Combining government investments in parental leave with investments in ECEC can help address these inequalities, as government spending on ECEC is associated with increased female employment and lower gender pay gap (Albanesi, Olivetti and Petrongolo, 2023[63]).

Thus, complementary ECEC entitlements that align with the duration of paid parental leave are crucial for maximising the benefits of both parental leave and ECEC. However, in many OECD countries, there is a discrepancy between the duration of paid leave and ECEC entitlements or targeted access to subsidised ECEC for vulnerable families (Eurydice, 2023[64]; OECD, 2024[65]). Even when parental leave and ECEC provisions are aligned, the funded hours of ECEC services often fall short of matching the working hours of many parents, particularly lower wage workers who are more likely to be in jobs with irregular working hours. Closing the gap between parental leave and access to ECEC would allow children from socio-economically disadvantaged backgrounds to more easily access and benefit from ECEC provision, buffering the effects of family disadvantage in early childhood (Schmutz, 2024[66]) (see also Chapter 5).

Access to various forms of leave, particularly those that include flexible work arrangements, is vital for parents to fulfil essential childcare responsibilities, such as scheduling preventative paediatric visits and caring for sick children at home, as well as supporting parents to breastfeed. Flexible work patterns also offer multiple benefits for child development and well-being. Evidence indicates that flexible working options, including remote work and adjustable hours, help parents engage more actively in childcare responsibilities (Augustine, Kim and Lee, 2023[67]). Moreover, flexible work patterns can promote a better home environment for children's well-being and development through its positive effects on parent-child interactions and family cohesion (Hokke et al., 2024[68]; Kim, 2018[69]).

The social policies discussed in the previous sections combine with many other policy areas that are generally beyond the scope of this report, but also have important implications for children’s home environments and engagement with ECEC. For instance, housing and urban planning policies can be a critical mechanism both for reducing poverty and for encouraging use of ECEC services, as families facing housing instability have additional barriers to accessing ECEC, and high-quality ECEC programmes are typically less available in lower-income neighbourhoods (Thévenon et al., 2018[70]; Shaw et al., 2020[71]) (see also Chapter 6). Other social policies, such as family and child allowances, including cash transfers, tax relief or in-kind support, can help alleviate financial pressures and offset ECEC costs for families, especially for families at greater risk of poverty. In many OECD countries, these measures have been effective in enhancing household income and reducing child poverty (Thévenon et al., 2018[70]). These policies can also complement ECEC policies in supporting family planning choices that have positive effects on fertility rates (Fluchtmann, van Veen and Adema, 2023[72]). Nevertheless, the design of these policies – whether universal or targeted based on income, family type, size or child age – can lead to varying effects on family income depending on the country context (Thévenon et al., 2018[70]).

Likewise, employment policies shape families’ income and their need for ECEC services. Among the wide range of employment policies, employment services (so-called active labour market policies) complement other social services by assisting adults, including parents, in navigating the labour market, improving their skills and finding job opportunities. These services can, for instance, propose job search support and training that match individuals’ skills with market demands. While programmes that offer job search support and high-quality training, or impose welfare sanctions, can effectively boost employment and income in the long term, they can initially have negative effects on household income, while participants are investing their time in retraining rather than receiving wages in the labour market or experience a decrease in their unemployment (or other social) benefits (Osikominu, 2012[73]; OECD, 2023[74]; Vooren et al., 2018[75]). These challenges can make it more difficult for many parents to dedicate time and resources for training programmes in the face of financial disadvantages and childcare responsibilities (Zoch, 2022[76]). Offering training programmes for parents alongside ECEC services for children and other social supports can make them more appealing to families and lead to higher family income, with positive implications for children.

Families with young children engage to different extents with the range of policies and programmes described throughout this chapter. This section defines what co-ordination and integration mean across the policy landscape and describes several models that highlight considerations for governments taking an early childhood centred approach to reducing inequalities. These models and considerations are then applied in Chapter 10 to explore the potential and limitations of comprehensive policy approaches and service models.

Different degrees of policy and service integration can be considered in the landscape of comprehensive services, from complete fragmentation to complete integration (

Table 4.1). While complete fragmentation is unlikely to be desirable, full integration may also not be the most appropriate model for many types of services. For example, while some aspects of primary medical care can be meaningfully integrated with ECEC systems or programmes, there are many advantages to maintaining distinct health and ECEC systems, including the ability for each to specialise in their respective areas to best address their goals and meet constituent needs. Striking a balance between these extremes in the connectedness of the early years services is important for simplifying access and fostering engagement among vulnerable families (see Chapter 10). This can be achieved through different degrees of alignment, including occasional co-operation, regular collaboration, or more systematic co-ordination. Consistent with these definitions, this report uses the term “integrated” to refer to policies or programmes that have fully formalised co-ordination through intentional mechanisms such as funding, management and oversight. “Co-ordination” is used to refer to policies and programmes that have formal mandates for systematic collaboration, but that do not reach the level of full integration under one ministry, agency or another formal umbrella.

Previous OECD work has further identified horizontal and vertical aspects of integration as critical considerations (OECD, 2015[40]; OECD, 2023[5]; Dirwan and Thévenon, 2023[7]) (Figure 4.3). Vertical integration refers to the extent to which various levels of governance work together, as well as how they align with non-governmental organisations that provide services directly (OECD, 2023[5]). Subnational entities (e.g. regional or local ones) often bear direct responsibility for a broad range of services provided for young children and their families. These entities are influential in determining the quality and efficacy of the services provided, as well as being responsible for identifying specific needs of children and families within their communities, while working within the context of national policies.

Horizontal integration refers primarily to alignment that occurs within a particular level of governance or service provision. Child development and well-being are inherently multifaceted, necessitating the involvement of multiple actors to create a shared vision that shapes the development of comprehensive services. A co-operative approach (if not more co-ordinated or integrated) at the level of central governance can facilitate policy designed to meet the diverse needs of children, encompassing health, education and social welfare. Given the importance of local authorities in implementing and monitoring policies related to early childhood, alignment across agencies within this level of governance is also important.

The continuum of fragmentation to integration can also be considered for other dimensions of policy implementation and programme implementation, such as geographic area or target groups. A place-based approach, which focuses on co-ordination of services within a specific geographic area (i.e. neighbourhood or community), is increasingly viewed as a promising strategy that is rooted in the ecological model of child development (Goldfeld et al., 2021[77]). Such initiatives capitalise on the common understanding that children are affected by their local environments and through multiple types of interactions and services, while also being tailored to local needs.

Similarly, integration or co-ordination of policies and services may be organised with respect to a specific target population. These target groups may be defined by age (e.g. children under age 3), by family migration or language background, by income levels or any number of other population characteristics. The principle of proportionate universalism can inform policy and service co-ordination for target groups or at the level of a geographic area. Proportionate universalism refers to the idea of catering to all while increasing the level of effort and attention paid to reaching and responding to those who most need particular services (Mamot, 2010[78]) (see Chapters 3 and 6). This approach entails identifying the factors that lead to vulnerabilities in early childhood and targeting these needs in service provision; it can involve tailored outreach programmes, specialised resources, and culturally sensitive practices to address the unique challenges faced by specific groups (Carey, Crammond and De Leeuw, 2015[79]). Profiles of some different models of service co-ordination that span these different dimensions (i.e. vertical and horizontal, place-based and targeted to specific groups) are described in Box 4.3.

With the complexity of policies and programmes relevant for early childhood, as well as the complexity of child and family needs during this developmental period, co-ordination or integration are promising directions for facilitating access and more effectively reaching vulnerable populations. A well-connected service environment fosters ongoing knowledge exchange among providers and stakeholders, facilitating a holistic response to children's needs. Starting with prenatal services to support healthy pregnancies, this continuity extends through the developmental milestones of early childhood. The integration of services involves a mix of provisions implemented across the ecosystem of child development, encompassing various settings, actors and policies that drive economic and social services available to families. These provisions address needs in education, parenting, health and living conditions, thereby enhancing the resources available to parents, and promoting more inclusive and equal opportunities for young children. ECEC has the potential to serve as a central component of co-ordinated and integrated systems that involve all of these different elements.

However, looking at social spending on family benefits and education across childhood in OECD countries, there is a clear gap in the continuity of investments in families with young children (Figure 4.4). The effect varies across countries, but on average across OECD countries, cash benefits and tax breaks make a substantial contribution to household income around the time of a child’s birth. This is followed by a sharp decline in social expenditures when children are about 1 year old, due to the time-limited nature of cash benefits and tax breaks associated with a birth and the fact that investments in ECEC (predominantly childcare) at this age are limited. Average social expenditures on childcare rise during the early childhood period, but do not reach the level of investments that are present once children enter the schooling sector, around age 5 or 6. This picture of investments across different modes of intervention and sectors during childhood underscores a lack of comprehensive service planning to meet the needs of families with young children, and in particular a lack of co-ordinated investments in offering high-quality ECEC.

Another important feature of social spending across childhood is the high share of cash benefits (e.g. parental leaves, subsidies for ECEC fees) (Figure 4.4) that may add to other cash benefits (e.g. unemployment benefits) received by parents. A key challenge is to find a balance between supporting parents in the early years of children’s life (and thereby reducing poverty in the short-term) and the risks that recipients remain inactive or maintain low incomes (e.g. through part-time work or unemployment) to continue to benefit from these policies, contributing to long-term and even intergenerational poverty (Duncan, Smeeding and Le Menestrel, 2020[81]). Cash benefits linked to family and early childhood policies, therefore, need to be carefully designed to support parents in re-entering the labour market after periods of parental leave and maintain incentives to move to higher-paid jobs, as family income is a key buffer against child poverty (see Chapter 5). Similarly, cash benefit or tax relief linked to other policies such as labour market policies affect parents’ labour market decisions, but might also have consequences on decisions concerning their children. For instance, tax relief for working parents or welfare benefits that require a minimum number of work hours to qualify for these benefits can boost household employment (OECD, 2023[74]; Pilkauskas, 2023[82]). However, there is also evidence that, in the United States, the Earned Income Tax Credit has boosted maternal employment but has also been associated with increased reliance on informal care rather than centre-based ECEC, largely due to limited availability of subsidised ECEC services (apart from specific programmes) (Michelmore and Pilkauskas, 2021[83]). These dynamics highlight the importance of carefully designing social and employment policies in tandem with ECEC policies to ensure they support employment and access to high-quality, regulated ECEC services rather than unintentionally steering families toward unregulated or informal arrangements. This might, however, be complicated to achieve when responsibilities for these policies lie at different levels of government.

Amid calls for promoting policy coherence for sustainable development (OECD, 2019[84]), the potential for ECEC as a connector and facilitator is not always recognised. The role of early years policies in shaping inequalities through its interactions with other policies is also not often fully taken into account. Given the critical importance of the early years for human development (see Chapter 3), identifying ways to more effectively centre policies around young children and their families holds great promise for improving equity of opportunities. This will require targeted attention to enhancing ECEC access (see Chapter 5), developing ECEC provision, particularly in marginalised areas (see Chapter 9), strengthening the quality of ECEC services (see Chapter 6) and ensuring that ECEC services respond to all children’s needs while valuing their diversity (see Chapter 7). Still, ECEC on its own, without consideration of the broader policy landscape, cannot be expected to mitigate early inequalities. As the models and considerations for co-ordinated services described in this chapter highlight, there is not a single strategy that is best suited to all contexts, nor one that can ensure that the full range of comprehensive services effectively reaches the most vulnerable families. The potential of co-ordinated and integrated policies and services to address early inequalities, as well as the limitations of these approaches and considerations for successful implementation, are further discussed in Chapter 10.

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