The impact of market forces on the provision of childcare: Insights from the 2005 Childcare Act in the Netherlands

Abstract

In January 2005, the Dutch government introduced the Childcare Act which replaced the former financing system which had elements of both supply- and demand-financing with a fully demand-financing system. Whereas previously public funds partly flowed to suppliers in the form of subsidies granted by local municipalities, they now flow exclusively to parents who are free to choose their childcare provider. This reform was intended to stimulate market forces in the market for childcare.This paper examines the impact of the introduction of market forces on the provision of childcare in the Netherlands.

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