Efficiency of Italian Early Child Care Provision: A Bootstrapped DEA Assessment

Abstract

Socio-demographic changes and financial restrictions in the context of the economic downturn have stressed the importance of increasing the efficiency in the provision of local public services. Among them, early child care is regarded as a crucial service for the positive effect on children scholastic achievements, female labor market participation as well as aggregate fertility rates. This chapter aims at analyzing the efficiency in the provision of early child care in Italy and studying the impact of the demand-side factors. We apply a two-stage semi-parametric approach to a large sample of Italian municipalities in the period 2001–2005. First, a bootstrapped Data Envelopment Analysis (DEA) is used to estimate the performance in the provision of early child care; then, a semi-parametric truncated estimation is employed to study whether municipalities react to demand-side pressures, such as women participation to labor market, by increasing the efficiency in the provision. DEA results show a remarkable heterogeneity in the provision of child care across Italian municipalities. We also find that demand-side pressure affects the efficiency.