Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment?

44 Pages Posted: 20 Apr 2016 Last revised: 27 Apr 2018

See all articles by Paulo Bastos

Paulo Bastos

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE); ISEG Lisbon School of Economics and Management,Universidade de Lisboa

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE); CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: February 22, 2016

Abstract

This paper examines whether an expansion in the supply of public preschool crowds out private enrollment. The paper uses rich data for municipalities in Brazil from 2000 to 2006, where federal transfers to local governments change discontinuously with given population thresholds. The results from a regression-discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services, but show no evidence of crowding out of private enrollment. This finding is consistent with a theory in which households differ in their 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.

Keywords: Early Childhood Development, Reproductive Health, Early Child and Children & #39, Early Child and Children's Health, Nutrition, Effective Schools and Teachers, Educational Institutions & Facilities, Educational Sciences, Small Private Water Supply Providers, Town Water Supply and Sanitation, Sanitation and Sewerage, Engineering, Water Supply and Sanitation Economics, Water and Human Health, Health and Sanitation, Sanitary Environmental Engineering, Environmental Engineering, Tertiary Education

Suggested Citation

Bastos, Paulo and Straume, Odd Rune, Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment? (February 22, 2016). World Bank Policy Research Working Paper No. 7573, Available at SSRN: https://ssrn.com/abstract=2736624

Paulo Bastos (Contact Author)

Technical University of Lisbon (UTL) - Research Unit on Complexity and Economics (UECE) ( email )

Rua Miguel Lupi, 20
Lisboa, 1200-781
Portugal

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

Rua do Quelhas 6
LISBOA, 1200-781
Portugal

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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