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Information Asymmetries between Parents and Educators in German Childcare Institutions

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  • Georg F. Camehl
  • Pia S. Schober
  • C. Katharina Spiess

Abstract

Economic theory predicts market failure in the market for early childhood education and care (ECEC) due to information asymmetries. We empirically investigate information asymmetries between parents and ECEC professionals in Germany, making use of a unique extension of the German Socio-Economic Panel Study (SOEP). It allows us to compare quality perceptions by parents and pedagogic staff of 734 ECEC institutions which were attended by children in SOEP households. Parents and staff were asked to rate the same quality measures. We detect considerable information asymmetries between these groups which differ across quality measures but little by parental socio-economic background or center characteristics. Our findings imply that information is not readily available to parents, an issue that should be addressed by policy-makers.

Suggested Citation

  • Georg F. Camehl & Pia S. Schober & C. Katharina Spiess, 2017. "Information Asymmetries between Parents and Educators in German Childcare Institutions," Discussion Papers of DIW Berlin 1693, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1693
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    References listed on IDEAS

    as
    1. Xiao, Mo, 2010. "Is quality accreditation effective? Evidence from the childcare market," International Journal of Industrial Organization, Elsevier, vol. 28(6), pages 708-721, November.
    2. M. Caridad Araujo & Pedro Carneiro & Yyannú Cruz-Aguayo & Norbert Schady, 2016. "Teacher Quality and Learning Outcomes in Kindergarten," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1415-1453.
    3. Johansen, A-S & Leibowitz, A & Waite, L-J, 1996. "The Importance of Child-Care Characteristics to Choice of Care," Papers 96-21, RAND - Reprint Series.
    4. Katharina Wrohlich, 2008. "The excess demand for subsidized child care in Germany," Applied Economics, Taylor & Francis Journals, vol. 40(10), pages 1217-1228.
    5. Georg F. Camehl & Juliane F. Stahl & Pia S. Schober & C. Katharina Spieß, 2015. "Höhere Qualität und geringere Kosten von Kindertageseinrichtungen – zufriedenere Eltern?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 82(46), pages 1105-1113.
    6. Naci Mocan, 2007. "Can consumers detect lemons? An empirical analysis of information asymmetry in the market for child care," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 743-780, October.
    7. Katharina C. Spiess & Eva M. Berger & Olaf Groh-Samberg, 2008. "Overcoming Disparities and Expanding Access to Early Childhood Services in Germany: Policy consideration and funding options," Papers inwopa08/52, Innocenti Working Papers.
    8. Benjamin Artz & David M. Welsch, 2014. "Childcare quality and pricing: evidence from Wisconsin," Applied Economics, Taylor & Francis Journals, vol. 46(35), pages 4276-4289, December.
    9. M. Caridad Araujo & Pedro Carneiro & Yyannú Cruz-Aguayo & Norbert Schady, 2016. "Teacher Quality and Learning Outcomes in Kindergarten," The Quarterly Journal of Economics, Oxford University Press, vol. 131(3), pages 1415-1453.
    10. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    11. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    12. Carsten Schröder & C. Katharina Spieß & Johanna Storck, 2015. "Private Spending on Children’s Education: Low-Income Families Pay Relatively More," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 5(8), pages 113-123.
    13. David M. Blau & Alison P. Hagy, 1998. "The Demand for Quality in Child Care," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 104-146, February.
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    More about this item

    Keywords

    Child care; quality; information asymmetries; socio-economic differences; Germany;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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