Distributional Effects of Publicly Funded Childcare

The policy instruments used to achieve this aim vary considerably. On the provision side, central and local governments run childcare facilities themselves, providing services to families with children of pre-school age at (often heavily) subsidised rates. On the funding side, while it is obvious that governments bear the direct cost of subsidies to public childcare facilities, they may also indirectly fund services that are purchased from private childcare providers (e.g. through childcare-related tax concessions and cash benefi ts available to parents).