The report from the National Centre for Social Research said that childcare providers were more sustainable in areas where affluent parents lived alongside lower income families.
'Local Childcare Markets' is the second wave of a longitudinal study involving interviews with 41 childcare providers and 19 local authority officers in London, a south-east commuter area, a north-east city area and the rural south-west.
Sarah Dickins, the centre's director of research and a co-author of the report, said there was real evidence that the Working Tax Credit was working, particularly in the urban north-east where providers were encouraged to set up. But parents' take-up of WTC in the south-west rural area where work is often more seasonal.
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