Introduction

Irish parents and guardians increasingly highlight the pressures placed on them in securing and identifying suitable childcare arrangements. Between the waiting lists, the fees, and the constant worry about whether their childminder will still be there next term, it’s a system that runs on parents just about holding it together.

The good news is that childcare has genuinely gotten cheaper in the last couple of years for many parents. Between 2022 and 2023, the share of a couple’s income going on full-time childcare dropped from 27% down to 17% (European Commission, 2025b). For a single parent, it fell from 17% to 7%, due to bigger government subsidies (European Commission, 2025b). That’s a real win, and it should not be overlooked.

However, Ireland still has the fourth-highest childcare costs in Europe (Cox, 2025), beaten only by the Netherlands, Switzerland and the UK. Parents are paying around €190 a week on average for a place, and in parts of Dublin that climbs past €260 a week (O’ Carroll, 2025). Cheaper fees haven’t fixed the problem, because price was never the whole story. A subsidy is only as good as the childcare it can actually buy. If there aren’t enough places, and if the people minding children can’t afford to stay in the job, then no amount of generous subsidy math will stop parents, mostly mothers, from being pushed out of work.

This paper outlines the current state of early years’ childcare in Ireland, drawing on the European Commission’s 2025 Education and Training Monitor, CSO labour force data, and recent ESRI analysis. The paper then turns to Denmark for comparison to see what a different approach delivers. Denmark provides childcare as a public service, similar to how most European countries treat schools, as opposed to something parents shop for on a subsidised market. The point is not to say that Ireland should copy Denmark exactly but instead to say that we need to examine what each system gives families, and identify what Ireland could actually learn from it.

Cheaper fees – but that’s not the whole picture

The recent improvement in fees is real. In September 2024, the minimum hourly subsidy under the National Childcare Scheme (NCS) increased by 53%, cutting weekly bills by as much as €96 for families who qualify (European Commission, 2025b). Add that to earlier fee cuts, and you can see why the share of income going on childcare has dropped so much since 2022. However, two things take the shine off that good-news story.

First, in real money terms, Ireland’s childcare costs are still among the highest in the developed world (OECD, 2022). For a two-earner couple with two young kids, Ireland sits in a cluster with the UK, the Netherlands and Switzerland, where net costs eat up at least 18% of average earnings (OECD, 2022). In countries with strong public childcare, that figure is under 10% (OECD, 2022).

Second, a shrinking cost share does not necessarily mean that parents are getting a better deal. It might just mean the government is picking up more of a bill that’s still high to begin with. I argue that that is a shakier kind of progress, because it depends entirely on the government choosing to keep paying that share in every future Budget.

The Economic and Social Research Institute (ESRI) has also flagged a design flaw hiding inside the subsidy itself. Support under the National Childcare Scheme (Doorley et al., 2025) gets withdrawn as a household’s income rises toward €60,000. Since that income cut-off has barely moved since 2019, inflation has quietly shrunk the subsidy’s real value for many families, even while headline rates were going up elsewhere (Doorley et al., 2025). In practice, this creates a genuine work disincentive. Research modelling mothers’ labour supply decisions in Ireland finds that subsidy withdrawal as income rises can offset the financial benefit of working additional hours, particularly for mothers of young children (Doorley et al., 2025).

Fees are down, but there still aren’t enough places

A subsidy makes an existing childcare place cheaper. However, it does not create a new place where none exists. That’s exactly where the recent progress runs out of steam. Only 24.4% of children under three in Ireland were in formal childcare in 2024, just 2.3 percentage points higher than the year before, and this is still way behind the EU average of 39.3% (European Commission, 2025b). Ireland’s own target for 2030 is 35.1% (European Commission, 2025b) so there is a long way to go to meet this target. I argue that if cheaper fees alone could fix this, we would already be seeing faster progress than that.

One important reason why supply has been slow to grow is workforce retention and pay, although it is not the only factor affecting childcare provision. Early years educators, who are overwhelmingly women, were earning an average of just €12.60 an hour as recently as 2020/21, and half of them were paid below the living wage (Pobal, 2022). The minimum rate has since been raised twice, most recently to €15 an hour in October 2025, covering around 35,000 workers (Department of Children, Disability and Equality, 2025). That’s real progress. However, Ireland’s general minimum wage is also rising, to €14.15 an hour from January 2026 (Government of Ireland, 2025).

This means that a trained, qualified early years educator now earns only slightly more than the national minimum wage, raising questions about whether the sector adequately rewards professional qualifications and responsibilities. Many early years professionals hold Level 8 degrees and work in settings inspected by the Department of Education, yet concerns have been raised that their qualifications, professional responsibilities and contribution to children’s development are not adequately recognised through pay or career progression (The Irish Times, 2026). In the Teaching and Learning International Survey (Talis), a large scale survey on early childhood education and care (ECEC) published by the OECD, Ireland tied with Japan for the lowest levels of staff satisfaction with their jobs (Malone, 2025; OECD, 2025). Furthermore, 49 percent of workers in Irish ECEC settings stated that they are likely, or very likely, to leave the sector within five years in order to care for family members (OECD, 2025).

While workforce shortages are also shaped by wider pressures facing childcare providers, including operating costs and administrative burdens, low relative pay remains a significant factor affecting recruitment and retention. It is therefore unsurprising that many staff continue to leave the sector, taking valuable experience and continuity of care with them.

Who ends up losing out most

The families feeling this gap hardest are not spread evenly. Families in rural areas face long waiting lists for childcare places with no other provider nearby to turn to. Families of children with additional needs report being turned away by services (see e.g. Casey, 2026) that legally should be able to support them under the Access and Inclusion Model, even though that scheme has recently been expanded to cover roughly 7,000 more children (Department of Children, Disability and Equality, 2023).

The wider labour market effects are also uneven. In the third quarter of 2025, 78.5% of men aged 15 to 64 were in work, compared with 70.9% of women; a gap of 7.6 percentage points that has remained relatively persistent in recent years (Central Statistics Office, 2025). This difference reflects a range of factors, including caring responsibilities across the life course, such as early years childcare, school-age childcare and eldercare.

However, Irish research identifies access to affordable childcare as an important barrier to labour market participation for mothers of young children, particularly those under three, who are the least likely to have access to formal childcare. (Doorley et al., 2025; European Commission, 2025b).

Denmark: paying for the service itself, not just a subsidy

Denmark took a very different path in relation to its approach to early childhood education and care, starting back in the 1960s and 70s. Instead of subsidising a private market like Ireland does, Danish local councils are legally required to guarantee every family a childcare place once parental leave ends. It is funded mainly through general taxation, the same way schools are. Parents still pay a capped amount, but it is the state, not the parent, that carries the risk of a place simply not being there (Larsen and de la Porte, 2022)

The results speak for themselves. In 2024, 81.6% of one- and two-year-olds and 94.4% of three- to five-year-olds in Denmark were in formal childcare for at least 25 hours a week – the highest rates anywhere in the EU (Scottish Government, 2025). Among children at risk of poverty, 82% got at least 25 hours a week of formal care, compared to an EU average of just 59% (Scottish Government, 2025). And female participation in the workforce in Denmark hit 79.7% in 2024, among the highest in Europe (Eurostat, 2026).

How Denmark’s system is funded changes the workforce too. As childcare centres are paid for by the public purse rather than squeezed out of thin private profit margins, the pay and working conditions for Danish childcare staff look a lot more like those of schoolteachers than anything close to Ireland’s near-minimum-wage jobs (Copenhagen Post, 2024). Researchers at Denmark’s VIVE institute see this as central to why the whole system holds together: as one senior researcher put it, Danish childcare lets both parents work full-time because the staff behind it have stable, well-supported jobs (Copenhagen Post, 2024).

What Denmark’s example can — and can’t — teach us

I am not advocating that Ireland simply copies Denmark’s model. Denmark built this system over roughly sixty years of steady public spending, with a higher tax base and a smaller, more uniform population to plan services for (Larsen and de la Porte, 2022).

Ireland’s childcare sector has also grown up around private ownership in a way that would take years, and a completely different level of funding commitment, to unwind, even if there were the political will to do it. Even Denmark’s own researchers point out that quality still varies a lot from one local council to the next (European Commission, 2025a), so it’s not a perfect model even on its home turf.

Yet, the comparison suggests that Ireland may be measuring success against the wrong benchmark. Falling childcare costs as a share of household income is an important achievement, but it does not, on its own, indicate whether the system is meeting families’ needs. Denmark’s model is designed to guarantee access to childcare and support a stable workforce, with affordability flowing from that broader public service approach rather than from subsidies alone. By contrast, Ireland has focused primarily on reducing costs, perhaps assuming that affordability would eventually improve availability. The evidence presented here suggests that this has not been the case.

What Ireland could actually do about this

Fix the subsidy design flaw before it gets worse

The ESRI’s analysis identifies a structural weakness in the National Childcare Scheme. While subsidy rates have increased, the household income thresholds that determine eligibility have remained largely unchanged since 2019. As wages and prices have risen, the real value of support has gradually eroded for many families, while the withdrawal of subsidies as incomes increase can discourage parents from taking on additional work (Doorley et al., 2025). A straightforward policy response would be to index income thresholds to wage growth or inflation, rather than relying on periodic adjustments. This would preserve the scheme’s intended value over time and reduce unintended work disincentives.

Track whether places exist, not just how much they cost

Recent childcare reforms have understandably focused on reducing costs for families. However, affordability alone does not indicate whether families can actually access childcare when they need it. Greater emphasis should therefore be placed on measuring the availability of childcare places, particularly for children under three, alongside affordability. Reporting progress on this measure – availability of places – against Ireland’s 2030 participation target would provide a clearer indication of whether the system is meeting demand and expanding access.

Recognise that childcare wages are still only catching up to the minimum wage, not overtaking it

Recent increases in sectoral pay represent important progress, but qualified early years educators continue to earn only marginally more than the statutory minimum wage despite the qualifications, responsibilities and professional standards the role requires. While workforce shortages are influenced by a range of factors, continued investment in pay, career progression and professional recognition would help to improve recruitment and retention, supporting a more stable childcare workforce over the longer term.

Be upfront that changing the whole funding model would take decades

Denmark’s experience demonstrates that high levels of childcare participation are the result of sustained public investment over several decades rather than short-term policy interventions. If Ireland wishes to move towards guaranteeing a childcare place for every family, this will require a long-term strategy that expands capacity, supports providers, strengthens the workforce and gradually reshapes the funding model. Such structural reform cannot simply be bolted onto the existing subsidy scheme; it will require sustained political commitment and investment over many years.

Conclusion

Childcare in Ireland costs less than it did three years ago, and that matters to the families feeling it in their pocket. However, the number of places available, and the pay of the workers who staff the classrooms, has moved far more slowly than the subsidy rates announced in each Budget. Denmark’s experience does not prove that copying its system would work exactly the same way here. Yet it does show that a system built to guarantee a place for every child, rather than just discounting whatever the market happens to charge – gets meaningfully better results on the exact aspects that Ireland is struggling with: how many children get a place, how stable the workforce is, and how many mothers are able to stay in work. Closing that gap is going to take a lot more than another round of subsidy increases.

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