This background paper is part of the Big Wins for Early Childhood report, developed through the Act For Early Years campaign. It examines how universal family policies, especially universal child benefits and paid parental leave, act as key financing tools to improve early childhood outcomes.
Governments face growing fiscal pressures, while families contend with rising costs that limit their ability to provide nurturing care in early childhood. Despite clear evidence that investing in early childhood yields the highest long-term returns, this period remains significantly underfunded worldwide.
Drawing on a structured literature review and quantitative analysis across OECD countries, the paper shows that underinvestment in family policies carries measurable economic and social costs, including higher child poverty, reduced access to early learning, and lower labour market participation among mothers.
The findings demonstrate that universal approaches to family policy can:
- Reduce child poverty and strengthen income security
- Improve child health, nutrition, and early development outcomes
- Support parental engagement and early learning environments
- Enable greater labour market participation, particularly among women
The analysis also shows that the most sustained impacts occur when policies function as coordinated systems, combining income support, parental leave, and accessible childcare services.
This is a provisional version of a background paper. A final, edited version will be published in due course.
