Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338993 
Year of Publication: 
2025
Series/Report no.: 
IFN Working Paper No. 1541
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
We study the wage effects of an expansion of for-profit preschools in Sweden, which followed after a reform in 2006 removed municipalities' right to veto private entry. The expansion decreased preschool employers' monopsony power by increasing the number of alternative employers. We use a differences-in-differences event study design to evaluate the impact on preschool workers' wages, and find no evidence that wages were affected. In the context that we study, the absence of an upward wage effect may be explained by the entering for-profit firms' propensity to hire less qualified, lower-paid staff, and workers from other sectors of the economy than the preschool sector.
Subjects: 
monopsony power
for-profit provision
preschool workers
gender gap
JEL: 
H44
I2
J31
J42
Document Type: 
Working Paper

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