CASH VERSUS CHILD-CARE SERVICES IN FINLAND

In 1985 the Finnish Parliament passed a law which stipulated that all children under age three were to be guaranteed a day care place as fro m the beginning of the 1990s. The law was made Possible by a political compromise in which the agrarian Centre Party won the backing it need ed to push through a system of state subsidies for the home care of ch ildren. As an alternative to a day care place, parents were now given the option of taking a child hone care allowance and using that allowa nce either for purposes of looking after their child themselves or for paying for a private place. Measured in terms of the number of users, the child home care allowance war a hugely successful innovation. Mos t parents of small children have used the allowance for at least some period of time. This was due above all to the size of the allowance co mpared with other social benefits. However, following cutbacks in allo wance expenditure of more than 20 per cent from 1995, the use of home care allowances declined at almost the same rate as the allowances wer e reduced. This brought significant short-term savings to the Governme nt and to local authorities, but in the longer ten other costs have be en rising. there has even been a sharp, unexpected decline in the birt h rate, The case of Finland goes to show that, even in a country where wage-earning motherhood has become firmly established, income transfe rs through family policy can have a very significant influence on the numbers opting temporarily for homemaking.