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Child center closures: Does nonprofit status provide a comparative advantage?

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  • Lam, Marcus
  • Klein, Sacha
  • Freisthler, Bridget
  • Weiss, Robert E.

Abstract

Reliable access to dependable, high quality childcare services is a vital concern for large numbers of American families. The childcare industry consists of private nonprofit, private for-profit, and governmental providers that differ along many dimensions, including quality, clientele served, and organizational stability. Nonprofit providers are theorized to provide higher quality services given comparative tax advantages, higher levels of consumer trust, and management by mission driven entrepreneurs. This study examines the influence of ownership structure, defined as nonprofit, for-profit sole proprietors, for-profit companies, and governmental centers, on organizational instability, defined as childcare center closures. Using a cross sectional data set of 15724 childcare licenses in California for 2007, we model the predicted closures of childcare centers as a function of ownership structure as well as center age and capacity. Findings indicate that for small centers (capacity of 30 or less) nonprofits are more likely to close, but for larger centers (capacity 30+) nonprofits are less likely to close. This suggests that the comparative advantages available for nonprofit organizations may be better utilized by larger centers than by small centers. We consider the implications of our findings for parents, practitioners, and social policy.

Suggested Citation

  • Lam, Marcus & Klein, Sacha & Freisthler, Bridget & Weiss, Robert E., 2013. "Child center closures: Does nonprofit status provide a comparative advantage?," Children and Youth Services Review, Elsevier, vol. 35(3), pages 525-534.
    • Handle: RePEc:eee:cysrev:v:35:y:2013:i:3:p:525-534
    DOI: 10.1016/j.childyouth.2012.12.004
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    References listed on IDEAS

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    1. Mario Luis Small & Laura Stark, 2005. "Are Poor Neighborhoods Resource Deprived? A Case Study of Childcare Centers in New York," Social Science Quarterly, Southwestern Social Science Association, vol. 86(s1), pages 1013-1036, December.
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    5. Mark A Hager & Joseph Galaskiewicz & Jeff A Larson, 2004. "Structural embeddedness and the liability of newness among nonprofit organizations," Public Management Review, Taylor & Francis Journals, vol. 6(2), pages 159-188, June.
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    Cited by:

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    3. Astrid Pennerstorfer & Dieter Pennerstorfer, 2018. "How Small are Small Markets? Location Choice and Geographical Market Size for Child Care Services," Economics working papers 2018-14, Department of Economics, Johannes Kepler University Linz, Austria.

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