Parents face financial challenges in Iceland due to childcare gap impacting gender equality

The gap between parental leave and access to childcare is significantly impacting gender equality, according to a recent report detailing the costs parents face in bridging this gap. The report, commissioned by the Minister of Infrastructure, highlights that parents experience a minimum 20% income reduction during the transition from parental leave to childcare enrollment.

Social Security payments during parental leave account for only 41% of parents’ market income, affecting their financial stability. The report indicates that women, on average, earn 21% less than men, exacerbated by shifts in income following childbirth. Women are more likely to take extended parental leave, often resulting in reduced working hours and higher childcare responsibilities.

Recent legislative changes have raised the maximum payment from parental leave funds in three stages, ultimately reaching 900,000 Icelandic krónur. This increase aims to alleviate some financial pressures but has yet to fully address the discrepancies faced by parents, particularly mothers, in the labor market.

Childcare costs vary widely. Many find it difficult to secure spots for children under one year old, and private options are often more expensive than public ones. Monthly fees for public daycare typically run around 30,000 krónur, while private care can exceed 140,000 krónur. Consequently, delays in securing childcare can lead parents to temporarily reduce their work hours or educational commitments.

The report also highlights that certain municipalities offer home payments and subsidies for childcare when public options are not available. However, there is limited data regarding the burden on families, particularly in relation to marital status, social standing, and income level.