When rationing plays a role : selection criteria in the Italian early childcare system

Our study explores the impact of selection criteria on the costs and benefits of early childcare for mothers’ employment, child development, and municipalities’ revenues by exploiting the selection criteria of different Italian municipalities in assigning childcare slots. In Italy, only around 13% of the demand for public childcare coverage is met, and the number of applications exceeds the number of places in childcare services in all regions. In conditions of excess demand, municipalities introduce selection criteria to give priority to families for whom access to public childcare appears to be more valuable. We analyse through simulations the consequences of introducing different selection criteria, using a representative Italian sample of households with children under 3 years of age (European Survey on Living and Income Conditions), and the selection criteria employed by six representative Italian municipalities. Our results have interesting policy implications. The benefits for child outcomes and mothers’ employment are stronger in municipalities where the selection criteria give priority to more disadvantaged households. However, in these contexts, selected households are less able to contribute to the financial sustainability of the service.