Does Private Ownership in the Kindergarten Sector Benefit the Children? Empirical Evidence from Norway Does the kindergarten's ownership form impact the quality?

Abstract

This paper investigates whether private ownership in the Norwegian childcare sector benefits children. The paper seeks to do so by investigating whether there are differences in quality between public and private kindergartens, both in terms of structural and process quality. The Norwegian government has an overarching goal to provide quality kindergarten services to everyone. In the past 20 year the his sector has seen a great increase in activity by private companies, and the past ten years have caused a great level of consolidation together with some PE activity, generating a great level of debate between the political flanks in Norway on the involvement of private companies in welfare services. Norwegian ordinary kindergartens are the ideal setting to analyse, given the close to even split between public and private facilities and public grants to encourage wide use of the services. When comparing the means of key structural indicators, we can conclude that public kindergartens significantly outperform their private peers. The same comparison of process quality indicators shows the opposite result: private outperform public kindergartens. When looking closer at different types of private kindergartens, we see a significant outperformance by independent facilities over the largest groups and PE-owned facilities on all quality measures. When analysing the effect of private ownership using a fixed-effect regression on key structural quality indicators, we cannot see any clear outperformance in terms of structural quality between public and private facilities when controlling for time effects and adding facility level and socioeconomic control variables. The same analysis shows a significant relationship between private ownership and process quality indicators. Further, we find that independent kindergartens significantly outperform other private kindergartens, while the more commercial ones perform on par with public facilities. We further find that size, opening hours and location are factors that greatly impact parental satisfaction. Since process quality is the main objective, private ownership benefits the children, but we cannot conclude that ownership impacts quality. The latter cannot be concluded as we see such large variations between private facilities, and private ownership is merely an indicator of other underlying trends, such as facility adaptability, work environment and teaching methods.