Abstract
Economic theory predicts market failure in the market for early childhood education and care (ECEC) due to information asymmetries. We empirically investigate information asymmetries between parents and ECEC professionals in Germany, making use of a unique extension of the German Socio-Economic Panel Study (SOEP). It allows us to compare quality perceptions by parents and pedagogic staff of 734 ECEC institutions which were attended by children in SOEP households. Parents and staff were asked to rate the same quality measures. We detect considerable information asymmetries between these groups which differ across quality measures but little by parental socio-economic background or center characteristics. Our findings imply that information is not readily available to parents, an issue that should be addressed by policy-makers.
Highlights
In recent years, shares of children attending early childhood education and care (ECEC) institutions have been growing across many industrialized countries
We contribute to the literature by investigating information asymmetries in a highly regulated childcare system, by focusing on the perspectives of parents and ECEC professionals and by considering structural quality indicators with varying levels of observability as opposed to focusing on process quality, which is generally hard for parents to assess
We investigate how the probability of information asymmetries relates to three dimensions: (i) theoretical observability of the respective quality aspects; (ii) parental socio-economic background; and (iii) characteristics of the ECEC center
Summary
Shares of children attending early childhood education and care (ECEC) institutions have been growing across many industrialized countries. Studies on the impact of ECEC attendance point to positive effects on child development, especially in the domain of cognitive competencies, including verbal and numeric skills ECEC programs can improve school readiness, especially for disadvantaged children. Such programs can decrease inequalities with respect to education and income An increasing body of research indicates that the effects of ECEC attendance depend on the quality of the interactions and the learning environment in these institutions Barnett (2011), for instance, summarizes that the effects of participating in highquality programs on cognitive outcomes of children are much larger than for programs of average quality. Kluczniok and Roßbach 2014) These quality dimensions work together in affecting child development
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