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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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  • Bassok, Daphna
  • Fitzpatrick, Maria
  • Loeb, Susanna

Abstract

Universal preschool policies introduced in Georgia and Oklahoma offer an opportunity to investigate the impact of government intervention on provision of childcare. Since Georgia used a voucher-like program and Oklahoma utilized its existing public schools, the two states offer a case study of how government provision compares to government subsidization alone. Using a synthetic control group difference-in-difference estimation framework, we examine the effects of universal preschool on childcare providers. In both states there is an increase in the number of formal childcare centers. With the voucher-like program in Georgia, the overall increase in care is partly driven by an increase in the supply of formal childcare in the private sector and partly driven by new publicly-provided preschools. However, there is substantial crowd-out of private consumption of preschool. In Oklahoma, where universal preschool is publicly provided, the increase in the number of childcare providers occurred only in the public sector. The expansion of publicly-provided care seems to be driven largely by movement of employees from private centers to public settings. As such, this case-study comparison suggests that government subsidization through funding was more effective at expanding preschool than government provision.

Suggested Citation

  • Bassok, Daphna & Fitzpatrick, Maria & Loeb, Susanna, 2014. "Does state preschool crowd-out private provision? The impact of universal preschool on the childcare sector in Oklahoma and Georgia," Journal of Urban Economics, Elsevier, vol. 83(C), pages 18-33.
  • Handle: RePEc:eee:juecon:v:83:y:2014:i:c:p:18-33
    DOI: 10.1016/j.jue.2014.07.001
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    Cited by:

    1. Cascio, Elizabeth U., 2017. "Does Universal Preschool Hit the Target? Program Access and Preschool Impacts," IZA Discussion Papers 10596, Institute for the Study of Labor (IZA).
    2. Miller, Luke C. & Galdo, Eva, 2016. "The effects of universal state pre-kindergarten on the child care sector: The case of Florida's voluntary pre-kindergarten programAuthor-Name: Bassok, Daphna," Economics of Education Review, Elsevier, vol. 53(C), pages 87-98.
    3. Bassok, Daphna & Fitzpatrick, Maria & Loeb, Susanna, 2014. "Does state preschool crowd-out private provision? The impact of universal preschool on the childcare sector in Oklahoma and Georgia," Journal of Urban Economics, Elsevier, vol. 83(C), pages 18-33.
    4. Ziebarth, Nicolas R., 2017. "Social Insurance and Health," IZA Discussion Papers 10918, Institute for the Study of Labor (IZA).
    5. Stephanie R. Cellini & Rajeev Darolia & Lesley J. Turner, 2016. "Where Do Students Go when For-Profit Colleges Lose Federal Aid?," NBER Working Papers 22967, National Bureau of Economic Research, Inc.
    6. Givord, Pauline & Marbot, Claire, 2015. "Does the cost of child care affect female labor market participation? An evaluation of a French reform of childcare subsidies," Labour Economics, Elsevier, vol. 36(C), pages 99-111.
    7. Sarah R. Cohodes & Joshua S. Goodman, 2014. "Merit Aid, College Quality, and College Completion: Massachusetts' Adams Scholarship as an In-Kind Subsidy," American Economic Journal: Applied Economics, American Economic Association, vol. 6(4), pages 251-285, October.
    8. 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.
    9. Bauernschuster, Stefan & Schlotter, Martin, 2015. "Public child care and mothers' labor supply—Evidence from two quasi-experiments," Journal of Public Economics, Elsevier, vol. 123(C), pages 1-16.
    10. Owens, Mark F. & Rennhoff, Adam D., 2014. "Provision and price of child care services: For-profits and nonprofits," Journal of Urban Economics, Elsevier, vol. 84(C), pages 40-51.
    11. repec:eee:regeco:v:67:y:2017:i:c:p:25-41 is not listed on IDEAS
    12. Pichler, Stefan & Ziebarth, Nicolas R., 2016. "Labor Market Effects of US Sick Pay Mandates," IZA Discussion Papers 9867, Institute for the Study of Labor (IZA).
    13. Elizabeth Cascio & Diane Whitmore Schanzenbach, 2013. "The Impacts of Expanding Access to High-Quality Preschool Education," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(2 (Fall)), pages 127-192.

    More about this item

    Keywords

    Crowd-out; Childcare; Government provision; Subsidy;

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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