Female unemployment is set to increase as private firms fail to create enough jobs to offset public sector cuts, a new report predicted today.
The IPPR think-tank called on the Government to improve childcare arrangements, arguing that the high cost was preventing mothers returning to work.
The report, published ahead of the latest unemployment figures, said universal childcare paid for itself, with each mother returning to work part-time on an average wage netting the Treasury £4,860 over four years in additional tax revenue, rising to £20,050 for full-timers.
IPPR said said the employment rate for women with children in the UK was lower than most OECD countries, ranking 19th.
Last month's figures showed there were over a million women out of work, the highest total since 1988, with the North East and Yorkshire suffering big increases.
Nick Pearce, IPPR director, said: "It is far better for our economy to have people in work and paying taxes than at home claiming benefits. Women will return to work if we can restart growth and give families access to free and high quality childcare.
"At a time of severe fiscal constraint, it is vital for Britain to focus resources where they will make the most difference - in helping families with the cost of living and strengthening the public finances over the long term."
Another report by the Chartered Institute of Personnel and Development (CIPD) said women fared slightly better than men in this year's jobs market despite the public sector cuts and a sharp fall in part-time employment.
The female unemployment rate has increased steadily from 6.5% to 7.5% since the end of the recession in 2009, but had fallen slightly relative to men this year, said the report.
Dr John Philpott, chief economic adviser at the CIPD, said: "As the economy weakens, private sector job creation dries up, public sector job cuts gather pace and unemployment continues to rise, it's far too soon to conclude what will happen to the relative fortunes of men and women in the jobs market in the coming months.
"Indeed our final view of 2011 may yet alter once we have a full year of data, but what we do know is that the relative position of women has not so far worsened as much as commonly perceived or was widely anticipated given the high concentration of women workers in the public sector and in part-time jobs more generally.
"This might indicate that the impact of economic austerity will prove to be more gender balanced than at first thought, although it also underlines how tough things are becoming for both sexes in our increasingly depressed jobs market."
Unemployment increased by 129,000 last month to 2.62 million, the highest since 1994, while youth unemployment reached a record high of over a million.
Research published by Working Links today showed an "encouraging growth" in manual trades like welding, construction and building, while posts in clerical work are becoming increasingly rare.