West-Europe, Netherlands, Social

The price effects of transitions in daycare

Daycare is becomming free of charge, but how will this impact families of different classes?

The Challenge

Dutch daycare is transitioning into a mostly public funded sector. Without regulation however, this might create negative price effects, especially for lower income households.

The Approach

Based on desk research, interviews and economic reasoning, Rebel analyzed the potential negative price effects of the current government plans to make daycare nearly – but not fully – free of charge. We showed that, due to the existence of scarce capacity, a significant amount of private investors in the markt, and the absence of price regulation (in the government plans),

there is a high risk of substantial price increases and of an increase in disequality between lower en higher income groups in the Netherlands. We also analyzed various regulation mechanisms to counter these risks and potential side effects of these mechanisms.

We increase awareness about the risks of the current daycare transition plans.

Rebels

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