Increasing public childcare coverage in Catalonia: an effective solution to reduce the socio-economic participation gap?

Abstract

This paper attempts to shed light on the redistributive effect of childcare policies in Catalonia. To this purpose, it examines the impact of a 2004 law aimed at increasing public childcare coverage for under three years-old in Catalonia on the participation in formal childcare for families from different socio-economic backgrounds. The policy is in line with the idea that high quality early childcare is more effective in reducing early life disadvantages than interventions in late childhood and adulthood. Nevertheless, several authors have warned that childcare policies may suffer from the so-called Matthew effect; i.e take-up rates of subsidised childcare are higher for high income groups than low income groups. This is especially the case when female labour force participation is highly stratified, coverage is low and working parents are prioritized in the access to public childcare; three conditions that, with some nuances, were present in the Catalan case prior to the reform. The paper exploits the uneven increase in public coverage across districts (comarques, in Catalan) to analyse its impact on the socio-economic participation gap. Given that the goal of the policy was not to attain full coverage but rather to reach EU recommendations of 30% coverage, it might be that the main beneficiaries of the increase in public coverage are middle-income classes who due to the lack of supply were previously relying on informal or private childcare. The paper uses Panell de Desigualtats Socials a Catalunya (PaD) database from Bofill Foundation, which has individual and household panel data of 5,785 individuals followed from 2001 until 2012. The dataset includes all necessary socio-economic information and, under the Secure Access Agreement, the household district (comarques) and municipality. The paper uses district fixed effects to alleviate endogeneity concerns. Yearly and district data on childcare coverage is taken from the Catalan Education department and Idescat.