Economics Brown Bag Seminar Series – Alan Weiss (The University of Melbourne)

Room 605, Level 6, FBE Building, 111 Barry Street, Carlton

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Faisal Sohail and Aaron Barkley

Title: For-Profit Status and Market Structure in Australian Child Care

Abstract: Nonprofit and for-profit firms compete in a number of important industries, such as health and aged care. However, little is known about how these firms compete and their respective incentives. In this presentation, I examine the drivers of market structure and quality provision in Australia's child care industry. Using a unique data set on the universe of long day care centers, I document that for-profits play a role in providing lower cost care to relatively under-served markets. Lower income and more regional markets have less access to quality care. Finally, I illustrate that the government regulator's measure of quality plays a relatively small role in consumer preferences for care.