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Understanding day care enrolment gaps

Insight by Jonas Jessen (DIW, Berlin) and Sevrin Waights (DIW, Berlin and LSE)

"We investigate why children with migrant parents or parents with lower educational attainment are less likely to be enrolled in day care in Germany"

Germany has a system of universal day care with highly subsidized slots. Parental fees are income-adjusted and low (by international comparison), if not completely abolished in some federal states. The system is also of relatively high quality and evidence shows that enrolment at younger ages delivers benefits for children’s development, especially for children from migrant or lower education backgrounds. Nevertheless, children from these backgrounds are less likely to be enrolled in day care.

We document these enrolment gaps for children younger than three in the figure below, which is based on data from a large-scale survey (N=62,473) of parents collected by the German Youth Institute (DJI). A unique feature of the data is that surveyed parents report not just whether their child is actually enrolled but whether they would like to have a slot in day care. The figure shows that children from certain backgrounds are less likely than others to be enrolled in day care. The figure also shows that while there are some gaps in demand, these are not as large as the enrolment gaps. Indeed, the likelihood of being ‘rationed,’ i.e. wanting a spot but not having one, is especially high for migrant parents.

Therefore, we investigate the role of ‘access barriers’ to day care with a focus on the shortages of places and the parental fees.

Shortages are pervasive in Germany but vary across time and place. We use this variation to determine if the enrolment gap changes with the level of shortages. We hypothesize that shortages of places may increase the enrolment gap if better resourced parents (in terms of money, time and connections) are better able to attain slots when they are scarce. Indeed, lower shortages mean a lower enrolment gap by parental education (but not by parental migrant status).

We next examine what happens to enrolment gaps after parental fees were eliminated for the first 5hrs of care per day in Hamburg in 2014. We compare what happened in Hamburg to what happened in other states like Hamburg in terms of enrolment gap trends using the synthetic control method and find that eliminating fees closes the enrolment gap by education but not by migrant background (as was the case for lower shortages). Thus, it appears that although fees are income adjusted, they still discourage some low-income parents.

Why do we not find any effects for migrant parents? We think that after making places affordable and available that some access barriers still remain for migrant parents, barriers that are less important for lower educated parents. These access barriers could be the result of racism or discrimination. Another possible explanation is that migrant parents tend to report greater quality concerns as reasons for not using day care and, thus, do not enroll their children in day care despite indicating a general demand to do so. Such concerns could arise because quality is lower where they live or because they are more concerned about quality, especially regarding aspects like a lack of multilingual teachers or a lack of respect for different religions and cultures.

The article “Understanding daycare enrolment gaps” has been published in Journal of Public Economics.

Reference: Jessen, J., Schmitz, S., & Waights, S. (2020). Understanding day care enrolment gaps. Journal of Public Economics, 190, 104252.

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