Malta’s free childcare scheme boosts employment for single mothers and larger families

Malta’s free childcare scheme has had a measurable impact on female employment, particularly for single mothers and families with multiple children, a Central Bank of Malta study found.

The childcare scheme introduced in 2014, offers free care for children aged three months to three years for working parents and those studying.

According to the study by Natalia Bezzina Maltseva, research economist at the CBM, the scheme has helped parents enter the workforce and reduced reliance on social benefits among vulnerable households.

This study predates recent controversy over childcare remarks by Gozo’s Bishop Anton Teuma. While public debate has been reignited by the bishop’s criticism of parents sending young children to childcare centres, the report shows that free childcare has helped single mothers and families with multiple children enter the workforce while raising female participation and reducing welfare dependence.

Impact on single mothers and vulnerable families

For single mothers, the likelihood of being employed increased enough to reduce the gap between them and other mothers by about a quarter. In concrete terms, many women who had been out of work after childbirth were able to return to paid employment for the first time.

Mothers with two children saw an even bigger improvement, with nearly 40% of the previous employment gap closed, meaning more women in these families were able to start working rather than stay at home due to childcare costs.

Mothers with three or more children also experienced gains, though slightly smaller. Most of these improvements came from women entering the workforce for the first time, rather than from women who were already working.

Dramatic growth in childcare enrolment

Enrolment in Malta’s childcare scheme surged from 875 children in 2014 to 9,400 by 2024, marking a nearly eleven-fold increase in participation. At the 2014 launch, usage was almost exclusively among infants; 99.4% (870 children) were under age 2, while only five children were in the 2–3-year age bracket.

By 2016, the composition shifted as the older cohort grew: children under age 2 represented 54.9% of participants, while those aged 2–3 rose to 45.1%. Overall, formal attendance for all children under 3 reached 51% by 2023.

This rapid expansion reflects both the demand for affordable childcare and the programme’s success in removing financial barriers that had previously limited maternal employment.

Broader labour market effects

The scheme generated modest fiscal savings, particularly through reductions in welfare dependency. Claims for social assistance under the Single Unmarried Parents (SUP) programme fell by around 1.2 percentage points after the reform, while general social assistance saw smaller reductions of 0.5–1.1 percentage points. There was no measurable effect on unemployment benefits, largely claimed by fathers.

Malta’s historically low female labour market participation framed the need for reform. In 2012, only 45.3% of women aged 15–64 were employed, compared with 74% of men. By 2024, following the free childcare scheme and the complementary initiative labelled Making Work Pay that include in-work benefits and the tapering of social welfare when a person finds a job, female employment rose to 72.3%, surpassing the EU-27 average.

Limitations and structural challenges

Despite these gains, most of the employment effects occurred while children were eligible for the scheme. Once children grew older, many mothers returned to their previous employment patterns. The overall impact of free childcare was smaller than in some other countries, partly because many Maltese families already rely on grandparents, relatives, or friends for childcare.

As a result, free formal childcare did not dramatically change childcare arrangements for all households. The scheme’s benefits were concentrated among traditionally disadvantaged groups. There was no significant differential effect by household income or for mothers of children with disabilities. This indicates that universal, work-conditional designs can promote equity without the administrative hurdles or stigma of means-tested programmes.

Childcare needs to be backed up by more support

The study also highlights structural limitations of work-conditional childcare. Without continued affordable childcare or flexible work arrangements, mothers may revert to inactivity if employment opportunities are unstable or poorly paid.

To sustain labour market gains, the report recommends complementary measures such as support for older children, part-time and flexible work options, and targeted outreach to vulnerable subgroups.

Overall, Malta’s Free Childcare Scheme demonstrates the potential of universal, work-conditional childcare to improve employment prospects for mothers, particularly those most at risk of labour market exclusion. While short- and medium-term gains are encouraging, lasting impact depends on extending support beyond the narrow eligibility window and addressing broader structural barriers to maternal employment.