July 16, 2012

Die Betreuungsgeld-Debatte: Implications for Integration

AGI

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Building a Smarter German-American Partnership

On June 6, 2012, Chancellor Angela Merkel’s cabinet approved a proposal that would issue financial support (a so-called Betreuungsgeld, or child care subsidy) to families who care for their toddlers at home in lieu of enrolling them in state daycare facilities. If passed, it will appropriate 300 million Euros (500 million dollars) of next year’s federal budget for this initiative. Supporters of the legislation contend that creating positive incentives for Germans with children will combat the nation’s sinking birthrate. Many who disagree with the proposed subsidy contend that Germany’s past attempts to increase birthrates have failed, and thus they regard diversion of additional funds to the initiative as wasteful. In addition, the legislation has garnered harsh criticism for its potentially adverse effects on immigrant communities.

The Organisation for Economic Co-operation and Development (OECD) released research of similar child care subsidies in other European nations, finding that immigrants accepted the child care subsidy in percentages far outpacing the national average. In some urban areas, the acceptance of the child care subsidies among immigrant families exceeded native Norwegians by 50 percent. This trend precipitates numerous externalities. First, the child care subsidy decreases the incentive for women to enter the work force, hindering economic integration and upward mobility. One scholar surmised that the subsidy prevented 15 percent of immigrant women from entering the labor force. Immigrant mothers staying at home to raise their children must not be regarded as inherently negative; however, entrance into the work force has proven immensely beneficial in allaying animosity between native and immigrant communities. Secondly, children of immigrants may not develop their language abilities as quickly if they are educated at home. In the OECD study, native and immigrant one and two year olds (the ages of children supported by the subsidy) attended kindergartens at a ratio of 2:1, respectively. This tendency impedes integration as “early participation in the residence country’s educational institutions has proved important in raising educational attainment levels of the children of immigrants.”

Granted, Germany provides far less support for child care than many other European nations and this recent legislation aims to support German parents equitably. However, this argument has not quelled the discontent of the initiative’s critics. In recent years, Germany has sought to expand state-supported child care, vowing to create 750,000 child care slots by 2013. This effort requires significant investment, and many experts feel that the budget proposed for the Betreuungsgeld would be better invested in efforts to meet this goal.

Debate continues to build as the Betreuungsgeld legislation develops into an increasingly divisive issue in German society. The Bundestag is expected to vote on the establishment of the subsidy this month.