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Supply and quality choices in private child care markets: Evidence from São Paulo

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  • Bastos, Paulo
  • Cristia, Julian

Abstract

Many developing countries have adopted the market approach for expanding the supply of child care, but little is known about the economic behavior of independent providers. Drawing on uniquely rich census data on child care providers from São Paulo, we document three main facts: (1) the stock of private suppliers is considerably larger in high-income city districts; (2) the quality of private provision – as measured by teachers' schooling, group size and equipment – is highly heterogeneous across space and increases systematically with local household income; and (3) a considerable share of centers operates below recommended (but not regulated) quality standards, especially in low-income districts. These findings are consistent with a model of endogenous entry and quality choices by heterogeneous providers. Market-driven heterogeneity in the quality of provision across space is an important consideration for the design of regulations in child care markets.

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  • Bastos, Paulo & Cristia, Julian, 2012. "Supply and quality choices in private child care markets: Evidence from São Paulo," Journal of Development Economics, Elsevier, vol. 98(2), pages 242-255.
    • Handle: RePEc:eee:deveco:v:98:y:2012:i:2:p:242-255
    DOI: 10.1016/j.jdeveco.2011.08.001
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    Cited by:

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    2. Larissa Zierow, 2017. "Economic Perspectives on the Implications of Public Child Care and Schooling for Educational Outcomes in Childhood and Adult Life," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 76.
    3. Bastos, Paulo & Straume, Odd Rune, 2016. "Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment?," World Development, Elsevier, vol. 78(C), pages 496-510.
    4. Zierow, Larissa, 2017. "Regulating Child Care Markets. Center-based Care vs. Family Day-Care in Germany," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168052, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Child care markets; Supply and quality choices; Minimum quality standards;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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