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Preschool education in Brazil:Does public supply crowd out private enrollment?

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Listed:
  • Paulo Bastos

    () (Research Department, Inter-American Development Bank, United States)

  • Odd Rune Straume

    () (Department of Economics, University of Minho)

Abstract

We examine if an expansion in the supply of public preschool crowds-out private enrollment using rich data for municipalities in Brazil from 2000-2006, where federal transfers to local governments change discontinuously with given population thresholds. Results from a regression-discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services, but show no effects on the quantity or quality of private provision. These findings are consistent with a theory in which households differ in willingness-to-pay for preschool services, and private suppliers optimally adjust prices in response to an expansion of lower-quality, free-of-charge public supply.

Suggested Citation

  • 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.
  • Handle: RePEc:nip:nipewp:16/2013
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    References listed on IDEAS

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    More about this item

    Keywords

    Preschool education; private and public provision; crowding-out.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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