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Performance-related pay and pension provision for childminders as a way of attracting skilled staff

Study
Dr. Michael Cordes
Performance-related pay and pension provision for childminders as a way of attracting skilled staff

Performance-related pay and pension provision for childminders as a way of attracting skilled staff

Study

Internal authors:

Dr. Michael Cordes

Publication Date:

In the educational elementary sector, day care has developed into one of the main pillars of childcare in recent years. Between 2006 and 2020 alone, the number of children cared for in this sector almost tripled (Federal Statistical Office, 2021). Since 2013, children from the age of one have been entitled to funding in a day-care centre or in a childminder, legally enshrined in § 24, paragraphs 1 to 3 of the German Social Code (SGB) VIII. As a child and youth welfare service, childminding is now also available on an ongoing basis and is considered equivalent to day care (BMFSFJ, n.d.).

The growing importance of child day care is also confirmed by a glance at the relevant public finance statistics: according to the Federal Statistical Office, a total of €5.11 billion was spent on the care of children in day care facilities and in child day care in 2019, of which almost €1.48 billion (29%) was spent on child day care (Statistisches Bundesamt, 2020). Since the 2013 amendment of Section 24 of the German Social Security Code VIII, this means that total expenditure on child day care and expenditure on child day care have roughly doubled. However, if we look back even further, it becomes clear that total expenditure in this area has been rising rapidly and continuously since 2005. The number of children in day care rose by around 25% between 2013 and 2020, from 140,000 to 170,000. By contrast, however, the number of child minders persons remained almost constant at just under 45,000 during the same period (Federal Statistical Office, 2021): In the decade from 2010 to 2020, the workforce grew at an average annual growth rate of just 1% (Authoring Group Skilled Labour Barometer, 2021, p. 72).

What has changed, however, is the age structure. In 2013, half of the caregivers were still under 45 years of age, but seven years later, only 45% were. In particular, there has been a decline of 4.5 percentage points in the number of day care workers under 35 years of age, accompanied by an increase of 8.2 percentage points in the number over 55 years of age. One possible explanation for these developments could be an unexpected attractiveness of the activity, which discourages younger people in particular from working in child day care on a permanent basis. Such an explanation is certainly not exhaustive based on the statistical figures on age distribution alone. However, it does become more meaningful when one looks at the remuneration situation of the child day care workers who are generally employed, which is sometimes well below the minimum wage. For people who take up child day care as a professional occupation and earn their income from it, this raises the question of financial adequacy in the short term and, in the long term, of security in old age. As with all other occupations, the profitability of the professional activity is an important factor in ensuring that there are enough skilled workers in this field. This study aims to shed more light on the financial situation of child minders with regard to qualification and old-age security. The starting point is the remuneration calculations for child day care in selected federal states, which were already prepared in 2020 by the FiBS Research Institute for the Economics of Education and Social Services on behalf of the Federal Association for Child Day Care. On this basis, two questions were examined in the present study.

  • How does the qualification profile affect the development of the income of child minders over a shortened period of employment?
  • What are the prospects for old-age provision for child minders over the course of a working life?

Both questions were addressed on the basis of prognostic model calculations, which allow a precise assessment of the questions mentioned.

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