When Rationing Plays a Role: Selection Criteria in the Italian Early Childcare System*

Abstract

Our study analyses the costs and benefits of early child care for mothers’ labour supply and child development in Italy, exploring the role of the selection criteria used by local governments to assign child care slots. In Italy, only around 13% of the demand for public child care coverage is met, and the number of applications exceeds the number of places in child care services in all regions. In conditions of excess demand, municipalities introduce selection criteria to give priority to families for whom access to public child care appears to be more valuable. We analyse, through simulations, the consequences of introducing different selection criteria for children, for their mothers, and also for municipalities, using a sample of households with children under three years of age (EU-SILC), and the selection criteria used by six representative Italian municipalities. Our results have some potentially interesting policy implications. The benefits in terms of child outcomes and mothers’ labour supply are stronger in contexts where selection criteria give priority to more disadvantaged households. However, in these contexts the selected households contribute less to the costs of child care, which reduces the municipalities’ monetary revenues.