Quasi-markets in preschool – a study of worker wages, qualifications and health

We analyze provider differences in preschool using linked worker–workplace data that span 20 years and that include the full population of municipal, for-profit and non-profit preschools in Sweden. We find that for-profit providers hire workers that have lower qualifications in all observed dimensions. For-profits also pay lower wages conditional on worker qualifications, and workplace switches to for-profit providers render a comparatively small wage boost. Non-profit providers hire fewer preschool teachers and younger workers but also workers with more experience and higher school grades, and they pay higher wages. Both for-profit and non-profit providers have better health outcomes than municipal providers.