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

Janneke Plantenga

in Childcare markets

Published by Policy Press

Published in print June 2012 | ISBN: 9781847429339
Published online January 2013 | e-ISBN: 9781447307679 | DOI:
Local providers and loyal parents: competition and consumer choice in the Dutch childcare market

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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

Chapter.  6130 words. 

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