Can childcare markets deliver?

Chilcare markets book cover By Eva Lloyd, co-editor of Childcare markets: Can they deliver an equitable service?

At first glance it may seem far-fetched, if not downright distasteful, to draw parallels between developments in childcare markets and emerging findings in the recent disturbing report from the deputy Children’s Commission’s Inquiry into Child Sexual Exploitation in Gangs and Groups, with a special focus on children in care (Office of the Children’s Commissioner, 2012). But both cases highlight risks attached to private-for-profit agencies delivering social welfare services on behalf of public bodies.

Modern states traditionally have varied in the amount of public support provided for early childhood education and care systems and other types of social welfare provision. Compared to commodity markets, childcare markets tend to form part of a mixed economy, in parallel with developments in social welfare markets such as the residential childcare market. In this mixed economy, the state, private-for-profit and private-not-for-profit providers all play a role in its provision, funding and regulation. The conclusion becomes almost inescapable that prioritising business interests, including profit or surplus, may underlie the geographical clustering of private sector care homes which was identified in this report. Almost half of all children in care were living outside the local authority with primary responsibility for their welfare, thus promoting their vulnerability, in particular to sexual exploitation (Office of the Children’s Commissioner, 2012, p 8).

There is growing evidence that marketisation and privatisation – including corporatisation – risk deepening, consolidating or widening inequalities of access to social welfare services. They may also drive up costs and promote qualitative differences between provider types. That this also applies to childcare markets, a distinctive and rapidly growing phenomenon in the present global economic climate, is shown from a range of disciplinary perspectives in a new edited book from the Policy Press, Childcare markets: Can they deliver an equitable service?

This book documents the economic and policy backdrops of eight current childcare market systems, allowing comparisons between privatisation and marketisation processes of early childhood services within their national policy and political contexts. It examines their consequences for parents, children, providers and the systems themselves. Alongside this it offers material about ‘raw’ and ‘emerging’ childcare markets operating with a minimum of government input, mostly in low income countries or post-transition economies in the process of adopting a market model. Finally, it explores alternative approaches and interrogates the case for government intervention.

Those authors writing from an education or childcare background emphasise the position of children, especially vulnerable children, and consider the detail of the care and education they are likely to receive within a market system. The economists’ contributions, on the other hand, consider the childcare market from the perspective of wider economic analysis and prediction, and they view childcare as a more or less well-functioning sector of the market. But despite these contrasting starting points, evidence presented challenges the expectation that the market will create incentives for providers to offer consumers more choice and competitive pricing, leading to a better balance between service supply and demand. Instead, all chapters in their own individual way demonstrate the case for increased attention to the ethical demands inherent in negotiating the interplay between social, political and economic issues and tensions within childcare markets.

This position is cogently argued by Jennifer Sumsion on the basis of her case study of the rise and fall of ABC Learning, the Australian childcare corporation which briefly became the world’s largest for-profit childcare provider, and virtually monopolized the Australian childcare market before its spectacular collapse in 2008. From her analysis of the current Dutch childcare system, Janneke Plantenga concludes that local providers and loyal parents do not by definition generate efficient markets, but that their atypical nature may generate additional market regulation, aiming at steering and perhaps limiting the choices of providers and parents. Even in New Zealand, according to Linda Mitchell, a state and community partnership model can build early childhood services more responsive to the wider context of children’s lives and supporting a stronger local sense of community than a market approach, while the Norwegian childcare system as described by Jacobsen and Vollset, does indeed operate on a non-profit basis, while still offering parents choice, by using a wide-reaching regulatory approach and judiciously targeted – and generous – public funding.

Rather than primarily ideologically driven conclusions, the book presents a balanced and pragmatic case for reform and outlines constraints needed to ensure that mixed economies of childcare can deliver equitable services.

Eva Lloyd, Reader in Early Childhood at the University of East London, UK, and Co-director of the International Centre for the Study of the Mixed Economy of Childcare (ICMEC), has extensive childhood policy research experience. Childcare markets: Can they deliver an equitable service? is edited by Eva Lloyd and Helen Penn and is available now at 20% discount from the Policy Press website.

1 Response to “Can childcare markets deliver?”


  1. 1 Hills Little Learners Childcare Toongabbie July 18, 2012 at 10:41 am

    Hi, I was simply checking out this blog and I really admire the premise of the article and this is really informative. I will for sure refer my friends the same. Thanks


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