The difficult access to childcare in Italy: the determinants from the supply and the demand side

Assembling information from several sources and a drawing on specially designed new survey, this paper finds that the shortfall in the supply of child care facilities remains large with respect to potential demand but is less severe with respect to the effective demand by households in Italy. Controlling for individual characteristics and local external environment, empirical evidence points to the key role played by the cost-quality schedule in supporting formal care. Local governments exert a significant influence on this factor through multiple channels, such as the intensity of regulation on quality standards, the degree of flexibility in the service provision, and the financing and tariff policies. These channels differ widely across geographical areas. The local set-up can give rise to contrasting effects on both the profitability of private childcare providers, who hardly fill the potential gap in the public network, and on household demand, which could benefit to a limited extent from a greater availability of facilities in case these are of unsatisfactory quality.