Investing in free universal childcare in the Republic of North Macedonia: Analysis of costs, short-term employment effects and fiscal revenue

This report examines the case for investing in free universal childcare services in order to: i) reduce gender inequality in employment, labour market activity and earnings; ii) to promote higher human capital through greater enrollment of children in early childhood learning and development; and iii) to ensure equal access to all children in formal childcare to foster the life chances and well-being of young children.

The study estimates the employment-generating and fiscal effects of investing in universal childcare in the Republic of North Macedonia. It calculates the total annual costs of investing in childcare services that would increase the enrollment (coverage) rate of the children in formal childcare services to different target levels. The Government has recently pledged to increase the enrollment rate of the children aged 3-6 from 40% to 50%. In addition, this study experiments with several options for the target enrollment rate, up to the full coverage, using parameters relevant to the Macedonian context.