Page 7 - IDEA Study 4 2017 Public financing for pre-school places

Introduction

Since the beginning of the new millennium, possibly up to a million parents have been
struggling with the shortage of places in public pre-school facilities (pre-schools). Due to
the existing demographic structure, the problem had exacerbated up until the year 2013,
with the number of children in pre-school age growing by nearly 30 percent. Since 2013,
the number of children in this age group has seen a rapid drop by nearly 10 percent.
In the near future, the number of pre-schoolers will continue to decrease.3 Based
on current nationwide figures regarding the number of children and places in pre-
schools, it seems that the shortage of pre-school places has solved itself over time, albeit
at the expense of the wasted opportunities of those who had (or did not have) children
in the 2000s.4 The crucial factor, however, is the balance of supply and demand
at the local level, i.e. in pre-schools in thousands of towns around the country. The lack
of pre-school facilities still persists in many communities, especially in towns with a surge
in residential buildings due to young people moving out of big cities to surrounding small
towns and villages. Furthermore, we should keep in mind the low attendance
of pre-schools by children under the age of 3, in fact one of the lowest within the EU.5

This study offers a cost and benefit analysis6, comparing the annual public expenditures
required for a single additional place in a pre-school facility to the average public
revenues. The main result of our analysis is the calculation of a probable net financial gain
(revenues minus costs) for public budgets. Our analysis does not include private gains
of families with children, both financial and non-monetary, which the readers may
include in the benefit side as they see fit.

Our analysis has shown that even under very conservative estimates, public support
of pre-school places does not represent any additional burden to the public budget
balance. Even based on very realistic assumptions, each additional place in a pre-school
facility translates to a net financial gain for public budgets. Taking into account

3 For more details on the trends in pre-school demand and supply, see Hůle (2015).
4 In the school year 2014/2015, children aged 2, 3, 4, 5, and 6 years respectively represented 33.9%, 84.1%,
89.4%, 90.5% and 16.5% of the total number of children in pre-school facilities.
5 Eurydice (2014), p. 65.
6 See Münich and Psacharopoulos (2014).

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