Index 3: Childcare and education expenses per young child before and after government subsidy

With the expansion of the government's childcare and edu-cation subsidy, the amount of support in this area per child aged 0~5 combining the amounts of subsidy for the usage of childcare facilities and special exemption increased by two folds from 730,000 won in 2007 to 1,160,000 won in 2009 and 1,430,000 won in 2011. With the exception of the subsidy for the usage of childcare facilities, actual expenses of households per child aged 0~5 did not decrease much, at 2,06,000 won in 2007, 2,150,000 won in 2009 and 2,080,000 won in 2011. "Net childcare and education expenses" that excludes the amount of special exemption from the actual expenses paid by house-holds for childcare and education did not change much either, at 2,000,000 won in 2007, 2,080,000 won in 2009 and 2,000,000 won in 2011. Meanwhile, "total childcare and education penses" that combine the government subsidy and actual ex-penses paid by households per child appeared to have risen considerably, from 2,730,000 won in 2007 to 3,240,000 won in 2009 and 3,430,000 won in 2011.

54 A study on the reduction of economic burden after the expansion of childcare support

<Table 15> Childcare and education expenses per child aged 0~5 according to income levels (2007~2011)

(Unit: 10,000 won)

Classification

Actual spending

①

Government subsidy for

childcare and education Total childcare

1st quintile group 115 145 0 145 260 115

2nd quintile group 151 144 2 146 295 149

3rd quintile group 149 130 6 136 279 143

4th quintile group 254 87 8 95 341 246

5th quintile group 405 39 17 56 444 388

2011

All 208 135 8 143 343 200

1st quintile group 93 156 1 157 249 92

2nd quintile group 123 187 3 190 310 120

3rd quintile group 199 171 6 177 370 193

4th quintile group 281 103 11 114 384 270

5th quintile group 341 61 18 79 402 323

Note: 1) Monetary amounts were converted into the 2010 real prices.

2) Amounts of special exemption were obtained through simulation based on the KOWEPS data, and amounts of actual spending and subsidy for usage of facilities were obtained by analyzing the original KOWEPS data.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

〔Figure 6〕 Overall status of childcare and education expenses per child aged 0~5 (2007~2011)

(Unit:10,000 won)

Note: Monetary amounts were converted into the 2010 real prices.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

Analysis of childcare and education expenses per young child according to income levels showed that the amounts of gov-ernment's childcare and education subsidy increased in all in-come groups during 2007~2011. In spite of such governmental support, childcare and education expenses actually spent by households grew in all income groups except for the 5th quin-tile income group with the highest income. The total childcare and education expenses per young child, which combines the government subsidy and actual expenses spent by households, did not show much difference among the 3rd, 4th and 5th quintile groups in 2011, although there had been large gaps in the total childcare and education expenses among the three

56 A study on the reduction of economic burden after the expansion of childcare support

groups in 2007 and 2009. This indicates that the disparity in childcare and education expenses invested per young child among different income groups has recently been alleviated.

However, it is necessary to pay attention to the fact that this decrease in disparity has resulted from the growth in govern-ment subsidy and net spending by households in the 3rd and 4th quintile groups which form the middle class. It appears that the economic burden of individual households related to child-care and education expenses has not declined significantly, al-though the gap in the expenses invested per child aged 0~5 among different income groups is being diminished.

〔Figure 7〕 Childcare and education expenses per child aged 0~5 according to income levels (2007~2011)

(Unit: 10,000 won)

Note: Monetary amounts were converted into the 2010 real prices.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

The results of the comparison of childcare and education ex-penses between households with one child aged 0~5 and those with two or more children show that the actual childcare and education expenses spent per child aged 0~5 was 1,910,000 won in households with two or more children, which is lower than 2,130,000 won in those with one child of the same age group. The fact that the expense per child is relatively low in families with multiple children suggests that the economy of scale is applied to child rearing. Concerning the changes from 2007 to 2011, households with two or more children aged 0~5 spent 1,650,000 won in 2007, 2,07,000 won in 2009 and 1,910,000 won in 2011 in annual childcare and education ex-penses per child, indicating an overall increase. This draws contrast with the fact that the same expenses in households with one child decreased slightly during the same period, at 2,210,000 won in 2007, 2,180,000 won in 2009 and 2,130,000 won in 2011.

58 A study on the reduction of economic burden after the expansion of childcare support

Government subsidy for childcare and education

Total

Note: 1) Number of children refers to that of children aged 0~5.

2) Monetary amounts were converted into the 2010 real prices.

3) Amounts of special exemption were obtained through simulation based on the KOWEPS data, and amounts of actual spending and subsidy for usage of facilities were obtained by analyzing the original KOWEPS data.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

〔Figure 8〕 Childcare and education expenses per child aged 0~5 according to number of young children (2007~2011)

(Unit: 10,000 won)

Note: Monetary amounts were converted into the 2010 real prices.

Source: 3rd yearly KOWEPS (2007), 5th yearly KOWEPS (2009) and 7th yearly KOWEPS (2011).

② Index 4: Percentage of childcare and education expenses