This is an author version of the contribution published on:
Daniela Del Boca & Chiara Pronzato & Giuseppe Sorrenti, 2015. "When rationing
plays a role: selection criteria in the Italian early child care system, CESifo Economic
Studies, 2015
The definitive version is available at:
http://cesifo.oxfordjournals.org/content/early/2016/04/19/cesifo.ifw008.abstract
When Rationing Plays a Role: Selection
Criteria in the Italian Early Childcare
System*
Daniela Del Boca
†
, Chiara Pronzato
‡
, and Giuseppe Sorrenti
§
†
University of Turin and Collegio Carlo Alberto, Moncalieri TO, Italy. e-mail: dani.delboca@unito.it,
‡
University of Turin and Collegio Carlo Alberto, Moncalieri TO, Italy. e-mail: chiaradaniela.pronzato@unito.it
and
§
University of Turin and Collegio Carlo Alberto, Moncalieri TO, Italy. e-mail: giuseppe.sorrenti@unito.it
Abstract
Our study explores the impact of selection criteria on the costs and benefits of early
childcare for mothers’ employment, child development, and municipalities’ rev-
enues by exploiting the selection criteria of different Italian municipalities in assign-
ing childcare slots. In Italy, only around 13% of the demand for public childcare
coverage is met, and the number of applications exceeds the number of places in
childcare services in all regions. In conditions of excess demand, municipalities
introduce selection criteria to give priority to families for whom access to public
childcare appears to be more valuable. We analyse through simulations the conse-
quences of introducing different selection criteria, using a representative Italian
sample of households with children under 3 years of age (European Survey on
Living and Income Conditions), and the selection criteria employed by six represen-
tative Italian municipalities. Our results have interesting policy implications. The
benefits for child outcomes and mothers’ employment are stronger in municipalities
where the selection criteria give priority to more disadvantaged households.
However, in these contexts, selected households are less able to contribute to the fi-
nancial sustainability of the service.
Key words: childcare, mothers’ employment, child development
1. Introduction
Over the past few years, economic studies have given greater attention to the role of early
childcare for children under 3 years of age, and its potential impact on mothers’ employ-
ment and child development. Most of these studies have focused on Europe, where public
childcare services are more prevalent than private services. In most European countries,
governments are directly involved in the provision of childcare services, while the supply
from the private sector is very limited. However, there are still pronounced differences in
childcare provision between countries. While northern European countries, such as
Denmark and Norway, have universal public childcare, southern European countries have
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CESifo Economic Studies, 2016, 1–24
doi: 10.1093/cesifo/ifw008
Original Article
CESifo Economic Studies Advance Access published April 20, 2016
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a mixed childcare supply provided by both the private and the public sectors. In these coun-
tries, public childcare availability is very limited, and is still far below the target of 33% set
by the Barcelona European Council (European Union, 2002).
The existing literature on this issue has focused on two important characteristics of
childcare: availability and costs. Our research extends the analysis to include another im-
portant characteristic of childcare that has been less explored: the selection criteria used by
local governments in assigning slots. In this study, we consider the case of Italy, where only
around 13% of children under 3 years of age attend public childcare, and the number of ap-
plications exceeds the number of slots in childcare services in all regions (ISTAT, 2010).
Given this excess demand, the municipality sets eligibility criteria for selecting the families
for whom public childcare access appears to be more valuable.
1
While the selection criteria appear to be similar from one municipality to another, the
importance (and therefore the points) each municipality gives to each family characteristic
varies. Thus, different types of households would ideally have access to childcare services in
different municipalities. The main selection criteria include family composition (whether
the household is led by a single parent and the number of siblings), parents’ working status
(whether they are employed or unemployed), and the social conditions of the families
(whether they suffer from health problems or social exclusion). The selection criteria
adopted by the municipalities and the different types of families selected may have signifi-
cant consequences for households, children, and the municipalities themselves. On the one
hand, the use of certain criteria can support maternal employment and promote early child-
hood education, especially among children from more disadvantaged family backgrounds.
On the other hand, the use of these criteria can lead to a reduction in monetary revenues
for the municipality, as households vary in their financial ability to pay fees.
2
The aim of our article is to explore the costs and benefits of introducing different selec-
tion criteria for a given society using a sample of households with children aged less than 3
years, and the selection criteria applied by six municipalities (Turin, Milan, Bologna,
Reggio Emilia, Rome, and Naples).
The article is organized as follows. In Section 2, we summarize the literature that has
analysed the impact of early childcare on child development and maternal labour market
participation. In Section 3, we describe the main characteristics of the Italian childcare sys-
tem. In Section 4, we present the data used and the simulation methods. We simulate how
the selection criteria used by six large Italian municipalities in assigning the available child-
care slots lead to different groups of children having access to care. We then explore the dif-
ferent levels of benefits for a given society. We summarize our conclusions in Section 5.
2. Previous Studies on the Role of Early Childcare
A large number of studies have analysed the impacts of childcare access on mothers’ labour
supply and on child outcomes. The most important characteristics of childcare considered
in these studies are availability and cost. In countries where the childcare services are pro-
vided at the private level, like in the USA and the UK, the focus is on the cost of the services;
1 We will refer to the selection process that operates through the eligibility criteria set by each
municipality as ‘rationing’.
2 Fees are assessed based on the financial situation of the family.
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while in countries where the provision is mostly public, like in Sweden, Norway, Germany,
and Italy, the focus is on the availability of services rather than on the cost.
A first stream of research has focused on the impact of childcare characteristics on
mothers’ labour supply.
3
Gustafsson and Stafford (1992) analysed the case of Sweden,
investigating the impact of childcare costs and availability on maternal employment. They
found that in regions where childcare is more widespread, childcare costs affect the prob-
ability that mothers will participate in the labour market; whereas in areas where childcare
is ‘rationed’, there is little evidence of significant price effects. Del Boca and Vuri (2007)
analysed the effect of childcare costs on mothers’ employment in the Italian context, taking
into account the effect of rationing in the provision of care. Their results also indicated that
availability has a greater impact than costs. Other studies from Germany reached similar
conclusions (Wrohlich, 2006). In an analysis of the impact of childcare availability across
European countries, Del Boca et al. (2009) found that childcare availability has a positive
effect on the probability of employment among women at all levels of education, but that
the effect is stronger for less educated women.
Another stream of literature has extended the analysis of the impact of childcare on
child outcomes.
4
Many of these studies have found positive implications of attending child-
care for child development, especially among children from disadvantaged backgrounds.
Felfe and Lalive (2014) estimated the impact of having attended childcare between ages 0
and 2 years in West Germany, and found that children with less educated mothers and chil-
dren of immigrants benefited more in terms of the development of both language and social
skills. The benefits were found to be large enough to close the scholastic achievement gap
between children of high and low socio-economic status, and of native-born and immigrant
parents.
Felfe et al. (2015) evaluated the long-run effects of a policy (implemented in the late
1990s) that introduced universal childcare for 3-year-old children in Spain. They compared
the later cognitive outcomes of children who attended childcare with those of previous co-
horts, and found a sizable increase in reading and math test scores, and a sizable decrease in
the likelihood of falling behind a grade. The results were even more pronounced for chil-
dren from disadvantaged households. Havnes and Mogstad (2011, 2015) evaluated the im-
pact of childcare expansion policies in Norway. They found that the policies had been most
effective in boosting the scholastic achievement levels of children in the lower and median
parts of the income distribution. These findings suggest that childcare policies have effects
across the population, but that the impact of childcare attendance is strongest among chil-
dren from disadvantaged backgrounds, who tend to receive lower levels of human capital
investment from their parents than their more advantaged peers.
Recent research focusing on Italy investigated the heterogeneity of local municipalities’
decisions regarding the supply of childcare. Using INVALSI data, Brilli et al. (2016) ana-
lysed the impact of childcare availability on both mothers’ labour supply and the cognitive
outcomes of children in elementary school. They found that the availability of public child-
care had a positive impact on both. However, their analysis of heterogeneous effects indi-
cated that the childcare availability coefficients were greater in areas with high levels of
rationing.
3 See Del Boca (2015a) and Pronzato and Sorrenti (2015) for surveys of recent studies on the rela-
tionship between childcare and maternal employment.
4 See Del Boca (2015b) for a survey on the impacts of childcare on child outcomes.
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In our work, we extend previous analyses by focusing on the selection criteria used by
local governments in assigning slots to children. We consider the impact of selection criteria
on the society (in terms of mothers’ employment and child development), and find that, as
expected, the benefits are larger for municipalities that give priority to disadvantaged
households. However, since in Italy fees are typically based on household income, munici-
palities that give priority to disadvantaged households face higher costs, as their revenues
are significantly lower.
3. The Characteristics of the Italian Childcare System
In Italy, the decision-making authority for policies related to childcare for children aged
0–3 years is decentralized: the municipality is the main decision-maker, while the regions
define the general management criteria. The central government is only responsible for
defining common objective standards and allocating resources among the regions. This
structure may explain why the availability of public childcare for children aged less than 3
years varies greatly across regions, from around 25% in some areas in the north to under
5% in most of the south (ISTAT, 2014).
From a national perspective, Italy is ranked quite high in the European context for child-
care availability for children aged 3–6 years, but quite low for childcare availability for chil-
dren less than 3 years of age: the utilization rate of public childcare among children aged 3
years and older is 95%, whereas the utilization rate among children less than 3 years of age
is just 13%. The demand for childcare is higher than the supply everywhere in Italy.
However, in regions where public childcare has a longer tradition and is more widespread,
the demand is greater. In general, the northern regions have higher numbers of applicants
and more slots, while the southern regions have fewer slots and lower numbers of appli-
cants (Istituto degli Innocenti, 2006).
In past decades, the role of public childcare was primarily seen as providing care for
children while their parents are at work. Indeed, the main explicit objective of public child-
care has long been to support the labour market participation of mothers. Recently, how-
ever, supporting child development (especially among children from low-income
households) was added as an important objective. This objective has been implemented
through the introduction of quality standards, especially in areas with greater experience
with and longer traditions of childcare provision (such as Emilia Romagna and Tuscany).
5
Over the years, there has been some evidence that different ‘models’ of childcare that
give priority to one of the two objectives have evolved.
With an emphasis on the supply side, a municipality’s decision about the number of
childcare slots they will offer depends on their preferences (that is, regarding which types of
household they wish to target) and on their budget constraints. Each municipality estab-
lishes eligibility requirements with the goal of ensuring that the available slots are given to
the households who are likely to benefit the most. While absolute priority is given to the ap-
plications of children with disabilities, the other criteria can be assigned to one of two main
categories. The first category is related to the parents’ employment status: for example,
5 Budget Law 2002, Law 448/2001 (Budget Law 2002) defined formal child care as ‘structures aimed
at granting the development and socialization of girls and boys aged between 3 months and 3 years
and to support families and parents with young children’. Therefore ‘one of the most important
aims of public child care is educational’.
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