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Childcare marketsCan they deliver an equitable service?$
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Eva Lloyd and Helen Penn

Print publication date: 2012

Print ISBN-13: 9781847429339

Published to Policy Press Scholarship Online: January 2013

DOI: 10.1332/policypress/9781847429339.001.0001

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Local providers and loyal parents: competition and consumer choice in the Dutch childcare market

Local providers and loyal parents: competition and consumer choice in the Dutch childcare market

Chapter:
(p.63) Four Local providers and loyal parents: competition and consumer choice in the Dutch childcare market
Source:
Childcare markets
Author(s):

Janneke Plantenga

Publisher:
Policy Press
DOI:10.1332/policypress/9781847429339.003.0004

The Dutch childcare sector was completely reorganised by the introduction of the 2005 Childcare Act. This Act was perceived as a thoroughly modern piece of legislation, because financial support is redirected from the local authorities to the parents with the aim to increase parental choice. The explicit objective of this childcare reform was to stimulate the operation of market forces, so that childcare providers would respond to parental wishes in an efficient way. Important questions now arise as to the implications of the introduction of market forces in the childcare sector. What are the effects for providers and consumers of the transition from supply to demand financing? Are there signals of increasing internal and external efficiency within the childcare market? Is there indeed more competition, more choice and more quality? These questions are answered in this chapter with reference to the concepts of exit, voice and loyalty as introduced by Hirschman (1970). The chapter concludes that local providers and loyal parents do not by definition generate efficient markets. The very nature of this provision may lead to additional market regulation, aiming at steering and perhaps limiting the choices of providers and parents.

Keywords:   Dutch Childcare Act, Competition, parental choice, Efficient markets, Additional market regulation, Supply financing, Demand financing

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