TOWARD AVAILABLE, AFFORDABLE, AND QUALITY CHILDCARE IN SOUTH ASIA Recognizing that childcare services can have a positive impact on women’s economic inclusion, Women, Business and the Law TABLE 1: COUNTRY COVERAGE AND KEY INDICATORS presents a novel and comprehensive pilot dataset on regulatory Labor force frameworks around the availability, affordability, and quality of participation Paid Paid rate, female leave for leave for childcare services in 95 economies around the world. In South (% of mothers fathers Asia, data was collected in six economies: Bangladesh; Bhutan; Main female (calendar (calendar India; Nepal; Pakistan; and Sri Lanka (Table 1). The new data is Economy Income business population days) days) a stepping stone toward facilitating and informing policy dialogue coverage group city ages 15+) Bangladesh LMI Dhaka 35.0 112 0 around key demand and supply side avenues that limit or facilitate Bhutan LMI Thimphu 51.6 56 7 the formal provision of childcare services, their affordability, India LMI Mumbai 19.2 182 0 quality, and uptake by parents. The pilot data presents a Nepal LMI Kathmandu 78.7 98 21 framework showing a range of options that governments may Pakistan LMI Karachi 20.7 112 0 Sri Lanka LMI Colombo 30.9 84 0 support to meet the needs of working mothers and families, although international best practice frameworks have yet to be Source: Women, Business and the Law 2022 and World Development established. Indicators 2021. Even when available, the provision of formal childcare does not The enactment of policies to make childcare available, always guarantee its uptake because supply- and demand-side affordable, and of decent quality is a priority due to its constraints, including convenience of services, costs, quality, and potential to achieve better market outcomes for women, social and cultural norms, limit the potential benefits (Figure 1). children, and the economy overall (Figure 2). FIGURE 1: KEY CONSTRAINTS IN THE CHILDCARE MARKET FIGURE 2: THE THREE PILLARS OF CHILDCARE Source: Women, Business and the Law 2022. Sources: Devercelli and Beaton-Day 2020; Muller and Jaen 2020. International law has long recognized that working parents need access to outside childcare and called for making childcare facilities more readily available Source: Women, Business and the Law 2022. AVAILABILITY In South Asia, Bangladesh is the only one out of the six pilot TABLE 2: LEGISLATION GOVERNING PROVISION OF CHILDCARE economies where regulations are in place for both public and private childcare services for children younger than the Earliest formal preprimary school starting age (typically 3 years). In age at Preprimary Employer which Public Private Nepal, the education rules regulate care in private child Economy childcare school provision provision provided development centers for children below 4 years of age, while starting or services * * age supported the state takes this responsibility with the start of the are preprimary school by the child at 4 years of age (Table 2). In available Bangladesh 4 months 3 Bhutan, India, Pakistan, and Sri Lanka, there are no laws Bhutan 5 regulating provision of public or private childcare in center- India 6 months 3 based settings. Nepal At birth 4 Pakistan At birth 3 The childcare reform in the region has been gaining Sri Lanka At birth 3 momentum. The Child Daycare Centre Act 2021 of Source: Women, Business and the Law 2022. Note: *public and private provision includes care services provided in center-based settings. Bangladesh, for example, institutionalized the provision of childcare services for children from 4 months to 6 years of FIGURE 3: ECONOMIES WITH LAWS REGULATING PROVISION OF age. The new Act regulates diverse types of childcare PRIVATE OR EMPOYER CHILDCARE ONLY provision (public and private) in center-based settings. Now 80 government, semi-government, autonomous, and 70 69 67 nongovernment organizations can, under their own 60 management, establish and operate day care centers with a % of economies 50 simple registration process. 40 30 24 20 19 In South Asia, laws solely regulating provision of employer 20 8 6 provided childcare are more widespread (Figure 3). In four 10 out of six economies examined in the region, employers are 0 Middle East & South Asia Sub-Saharan East Asia & Latin America Europe & OECD high mandated to provide on-site childcare. A minimum threshold North Africa Africa Pacific & Caribbean Central Asia income of female employees (Bangladesh, Pakistan, Sri Lanka) or Source: Women, Business and the Law 2022. employees regardless of gender (India) generally triggers this enforcement (Table 3). Nonetheless, market studies TABLE 3: CONDITIONS UNDER WHICH EMPLOYERS ARE conducted within the framework of the International Finance MANDATED TO PROVIDE CHILDCARE SERVICES Corporation’s (IFC) Tackling Childcare project estimate that Number of only 27 percent of employers in Pakistan and 23 percent in employees Number of Bangladesh offered some type of support to meet the regardless female Economy of gender employees Legal basis childcare needs of their employees. Those employers who Bangladesh Bangladesh Labour Act No. 42 of provided childcare support reported higher employee 40 or more 2006 retention and significant business benefits, including the India Maternity Benefit (Amendment) 50 or more Act No. 6 of 2017 increase in the company profitability and productivity. Pakistan 10% or The Sindh Maternity Benefits Act more 2018 Because public provision of childcare in the region is nearly Sri Lanka Prescribed Maternity Benefits Ordinance No. absent or insufficient until the child reaches the formal by the 32 of 1939 Minister preprimary school starting age and private services are unaffordable for families, more could be done to expand Source: Women, Business and the Law 2022. employer supported childcare in the region. This could decrease business losses and increase one of the world’s lowest rates of female labor force participation. 2 REGIONAL PROFILE: SOUTH ASIA AFFORDABILITY Even when formal childcare is available, affordability is a FIGURE 4: FINANCIAL SUPPORT FOR PARENTS OR PROVIDERS central concern that influences the demand for childcare OF CHILDCARE SERVICES, BY REGION services and the extent to which parents use it. Therefore, the affordability pillar measures regulatory interventions 100 100 that support the affordability of childcare services through 90 government-provided free services and financial and 80 nonfinancial support for families, private childcare centers, % of economies 70 60 and employers. 60 58 50 Out of six economies examined in the region, regulation of 40 the public provision of childcare services for children below 30 25 23 19 3 years of age is in place only in Bangladesh. Nonetheless, 20 the provision of these services is not free. The Child 10 0 Daycare Centre Act 2021 does not specifically define the 0 manner according to which the cost of childcare is OECD high income East Asia & Pacific Europe & Latin America Middle East & Sub-Saharan Central Asia & Caribbean North Africa Africa South Asia determined, but childcare centers are required to display their service charge in a visible place. In Nepal, the specific Source: Women, Business and the Law 2022. conditions under which fees are determined for private childcare development centers are also not explicitly laid out within the existing regulatory framework. MAP 1: TAX BENEFITS TO EMPLOYERS FOR PROVIDING OR SUPPORTING CHILDCARE FOR THEIR EMPLOYEES South Asia is the only region with no financial support granted to parents specifically for the use of childcare services or providers of such services – on ‘the books’ at least. The absence of financial support impacts the demand and supply of childcare services, affecting women’s participation in the labor market. With fiscal limitations and specific country circumstances in mind, governments in South Asia could consider expanding policies to grant financial support to parents or providers that can come in a variety of forms, including ongoing subsidies, allowances, reimbursements, one-time grants, and in a similar fashion as in other regions (Figure 4). Financial support is typically conditioned by a set of criteria, including income, employment status of parents, and the number of children. Tax benefits in the form of credits, deductions, or exemptions on the personal income (for parents) or corporate income (for private providers) is another policy tool available to facilitate both the supply and demand of childcare services. There is no economy in the region that provides tax benefits to parents or private childcare centers. Nonetheless, Bangladesh and India are the two economies that grant tax deductions to employers on any Source: Women, Business and the Law 2022. expenditures incurred for providing or supporting childcare services for the benefit of their employees (Map 1). 3 REGIONAL PROFILE: SOUTH ASIA QUALITY Quality childcare improves children’s development outcomes, Creation of the enabling regulatory environment for the including school readiness, healthy nutrition, and educational provision of childcare services, while ensuring that these achievements, leading to more promising long-term services correspond high-quality standards remains a employment prospects and higher earnings. High-quality challenge for economies in the South Asia region. childcare services also influence parental decisions to use formal childcare services. Definitions of what constitutes high TABLE 4: LEGISLATION GOVERNING QUALITY OF CHILDCARE quality vary across contexts due to differences in economic development, resource availability, and cultural and social norms. However, there is some consensus on the elements Economy Bangladesh* Nepal* Operating authorization that determine high quality childcare, regardless of circumstances. Teacher-to-child ratios and group sizes Periodic mandatory Structural quality, for example, is a critical element of early training for educators childcare services. Children can receive individual attention, Mandatory inspections and teachers can more effectively cater to diverse learning Mandatory reporting of needs, with specified teacher-to-child ratios – typically 1:10 or information 1:15 as recommended by international institutions – and Penalties for smaller group sizes – typically no more than 20 children. noncompliance Improving quality of care also means investing in the professional development of the workforce, including the Source: Women, Business and the Law 2022. *Regulated quality aspects in Bangladesh are applicable for both public and provision of regular trainings for educators at childcare private centers; in Nepal – only to private centers. centers, and ensuring the quality control with applicable laws and rules to minimize the risk of noncompliance by childcare FIGURE 5: EXAMPLES OF PENALTIES THAT CHILDCARE providers. The gaps on the examined quality parameters PROVIDERS FACE IN BANGLADESH persist across all pilot economies in the South Asia region, partly because the provision of childcare services is not Administrative fines are imposed for operating a childcare embedded in laws in the first place, except for Bangladesh and center without registration; obstructing the work of Nepal. However, even in Bangladesh and Nepal, the room for inspectors; and endangering the health of a child at a childcare center due to negligence of duty improvement remains (Table 4). In both Bangladesh and Nepal, one way to ensure the quality Imprisonment of up to 2 years can occur for operating a childcare center without registration and endangering the of the system in which childcare is delivered is through the health of a child at a childcare center due to negligence of requirement on operators to obtain the certificate of duty. registration (Bangladesh) or a formal approval from a municipality (Nepal). By establishing quality assurance Suspension or cancellation of registration is imposed if the certificate of registration is obtained by providing false mechanisms through mandatory inspections of physical information or fraud; any breach of governing laws and facilities or reporting of data by providers, governments can rules; non-renewal of registration in a timely manner; also hold childcare providers accountable for any failure to conviction of any offence. comply with the established standards. The Education Rules Source: Women, Business and the Law 2022. 2002 of Nepal mandate district education officers to inspect if child development centers are being run in accordance with the rules and relevant provisions. However, the regularity of these inspections is not specified, increasing the risk of noncontinuous compliance among providers. Penalties for noncompliance with the relevant laws are prescribed in Bangladesh only (Figure 5). 4 REGIONAL PROFILE: SOUTH ASIA REGIONAL TRENDS BY DATA POINT AVAILABILITY PILLAR ANSWER (YES/NO) Does the law regulate public provision of childcare services? 17% 83% Does the law regulate private provision of childcare services? 33% 67% Does the law mandate employers to provide or support childcare services? 67% 33% Does the law establish adequate operating hours in public childcare centers? 100% Does the law establish adequate operating hours in private childcare centers? 100% AFFORDABILITY PILLAR ANSWER (YES/NO) 100% Does the law establish free provision of public childcare? Does the law establish conditions based on which cost to parents is determined? 100% Are fees charged by public childcare centers regulated? 100% Are fees charged by private childcare centers regulated? 100% Does the government provide some form of financial or tax support to parents for childcare? 100% Does the government provide some form of financial or tax support to private providers? 33% 67% Does the government provide some form of support to low-income families for childcare? 100% QUALITY PILLAR ANSWER (YES/NO) Are public childcare centers required to obtain licenses or authorization of some form? 17% 83% Are private childcare centers required to obtain licenses or authorization of some form? 33% 67% Does the law mandate a teacher-to-child ratio for public childcare centers? 100% Does the law mandate a teacher-to-child ratio for private childcare centers? 100% Does the law mandate a maximum group size in public childcare centers? 100% Does the law mandate a maximum group size in private childcare centers? 100% Does the law require educators at public childcare centers to undergo periodic training? 100% Does the law require educators at private childcare centers to undergo periodic training? 100% Does the law require quality assurance at public childcare centers? 100% Does the law require quality assurance at private childcare centers? 17% 83% Are penalties imposed for noncompliance with applicable laws by public childcare centers? 17% 83% Are penalties imposed for noncompliance with applicable laws by private childcare centers? 17% 83% DATA COLLECTION IN SOUTH ASIA For more information, please visit Data was collected in six economies: Bangladesh; Bhutan; India; Nepal; please visit Pakistan; and Sri Lanka. wbl.worldbank.org/en/childcare or contact wbl@worldbank.org. HOW TO USE THIS DOCUMENT This document aims to improve understanding of legal and regulatory systems around the availability, affordability, and quality of childcare services for children below preprimary school starting age in South Asia. It also seeks to build awareness of laws and identify areas for reform and other regulatory interventions. Support for the Women, Business and the Law childcare regional profile series is provided by the World Bank’s Knowledge for Change Program and the Multi-Donor Trust Fund for Jobs. 5 REGIONAL PROFILE: SOUTH ASIA