Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89167
Authors: 
Bastos, Paulo
Straume, Odd Rune
Year of Publication: 
2013
Series/Report no.: 
IDB Working Paper Series IDB-WP-463
Abstract: 
This paper examines whether an expansion in the supply of public preschool crowds out private enrollment, using rich data for municipalities in Brazil from 2000-2006, where federal transfers to local governments change discontinuously with given population thresholds. Results from a regression-discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services, but show no effects on the quantity or quality of private provision. These findings are consistent with a theory in which households differ in willingness to pay for preschool services, and private suppliers optimally adjust prices in response to an expansion of lower-quality, free-of-charge public supply.
JEL: 
D12
I21
I28
L21
O15
Document Type: 
Working Paper

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