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Does State Preschool Crowd-Out Private Provision? The Impact of Universal Preschool on the Childcare Sector in Oklahoma and Georgia

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  • Daphna Bassok
  • Maria Fitzpatrick
  • Susanna Loeb

Abstract

The success of any governmental subsidy depends on whether it increases or crowds out existing consumption. Yet to date there has been little empirical evidence, particularly in the education sector, on whether government intervention crowds out private provision. Universal preschool policies introduced in Georgia and Oklahoma offer an opportunity to investigate the impact of government provision and government funding on provision of childcare. Using synthetic control group difference-in-difference and interrupted time series estimation frameworks, we examine the effects of universal preschool on childcare providers. In both states there is an increase in the amount of formal childcare. While there is no crowd-out in Oklahoma, some of the government subsidized preschool in Georgia replaces childcare that would have occurred otherwise. We find the largest positive effects on provision in the most rural areas, a finding that may help direct policymaking efforts aimed at expanding childcare.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18605.

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Date of creation: Dec 2012
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Handle: RePEc:nbr:nberwo:18605

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  1. Michael Baker & Jonathan Gruber & Kevin Milligan, 2005. "Universal Childcare, Maternal Labor Supply, and Family Well-Being," NBER Working Papers 11832, National Bureau of Economic Research, Inc.
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Cited by:
  1. Cohodes, Sarah & Goodman, Joshua, 2013. "Merit Aid, College Quality and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," Working Paper Series rwp13-005, Harvard University, John F. Kennedy School of Government.
  2. Paulo Bastos & Odd Rune Straume, 2013. "Preschool education in Brazil:Does public supply crowd out private enrollment?," NIPE Working Papers 16/2013, NIPE - Universidade do Minho.
  3. Stefan Bauernschuster & Martin Schlotter, 2013. "Public Child Care and Mothers' Labor Supply - Evidence from Two Quasi-Experiments," CESifo Working Paper Series 4191, CESifo Group Munich.
  4. Elizabeth U. Cascio & Diane Whitmore Schanzenbach, 2013. "The Impacts of Expanding Access to High-Quality Preschool Education," NBER Working Papers 19735, National Bureau of Economic Research, Inc.

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