Estimating Demand for preschools in Russia[Спрос На Услуги Дошкольных Образовательных Организаций: Эмпирический Анализ]

In this paper, using RLMS-HSE micro-data of 2000–2015 we analyze demand for preschools in Russia. Measuring demand for preschools, in particular unsatisfied demand is of high importance for public policy, but it is a challenging task due to the traditional identification problem: only a joint outcome of demand and supply is observed but not the demand itself. This problem is particularly severe in the Russian case where supply of slots in preschools is rationed and prices are regulated by state. To overcome this problem we employ an approach first proposed by Poirier (1980) and estimate a joint system of demand and supply equations as a partial observability model. Our results confirm a widespread view about the strong deficit of slots in preschools in Russia. We find that almost 80% all mothers with children of age 0–7 are willing to use preschools, but almost half of them are not able to do that due to the limited supply. At the same time, we show that there is a non-negligible group of households which potentially might use preschools but don’t do that. This indicates that a more effective redistribution of resources within the Russian public preschool system could lead to a higher enrollment. We also find that the amount of unsatisfied demand among non-employed mothers is higher than among the employed ones, which suggests that raising the availability of preschools could stimulate labor force participation of Russian women