Mothers who face high childcare costs work fewer hours, with Dublin mothers being hardest hit.
The ESRI and Pobal found parents spent an average of 12% of their disposable income on childcare for their three-year-old.
It says this posed "a significant barrier to employment for women", especially lone parents.
For those who pay, it says the average hourly cost of care for one child was €4.50 at the time of the Growing up in Ireland survey in 2011, or €4.84 in 2017 prices.
Costs were higher for those living in Dublin, East Leinster and other urban areas.
The report found that, all else being equal, mothers with higher childcare costs at age three tended to work fewer hours when their child was aged five.
The average costs depended on the type of childcare used:
- For a childminder in the family home: €5.70 per hour ( €6.13 in 2017 prices)
- For a childminder outside the home: €4.43 per hour ( €4.76 at 2017 prices)
- For centre-based care parents paid an average of €4.48 per week (€4.82 at 2017 prices)
The costs are based on one child - and so the burden is more severe for families with more than one child in childcare.