How long is the queuing for public childcare facilities in Korea? An empirical analysis of Korean households' childcare mode choice with the limited availability of public childcare facilities

Abstract

This paper empirically investigates Korean households' choice of childcare mode using the Korean Childcare Users Survey (2012). A multivariate logit model with partial observability (hereafter, PO-logit model) is employed to address the issue of Korean households' demand for public childcare facilities exceeding capacity limits.Our estimation result rejects the hypothesis of no queueing at conventional significance levels to advocate use of the PO-logit model in explaining Korean households' childcare choices. We decompose choice probabilities of public childcare facilities to estimate the size of queuing. Our results imply that 31.8% of parents preferring public childcare facility are forced to choose other childcare modes due to capacity limit. K E Y W O R D S childcare facility demand, Korea, limited slot offer, multinomial model, partial observability 1 | INTRODUCTION In Korea, the rise in the labor market participation rate of married females requires more childcare facilities to care for children. In response to the increased demand for childcare facilities, the Korean Government has expanded the number of public childcare facilities operated by the state. The government also initiated fiscal programs to expand the availability of private childcare facilities. These initiatives have been successful in rapidly increasing childcare facilities. Between 2002 and 2016, the number of childcare facilities increased from 22,147 to 41,084, and the number of children using childcare facilities jumped from 800,991 to 1,451,215 (Figure 1).One interesting observation is parents' strong preference for public facilities. Public facilities charge lower prices and have desirable characteristics such as higher teacher quality and larger space. Most of all, public facilities are perceived to be a safer place where parents can leave their children without concerns about child abuse. The prevalence of this strong preference for public facilities makes it difficult for parents to find a vacancy in these facilities. This situation makes parents wait for a considerable period until their children are admitted to a public facility.Such excess demand has even triggered political campaigns demanding that more public facilities should be provided, so that parents can access them easily.The objective of this paper is to analyze households' preference for childcare modes and to estimate the excess demand for public childcare facilities in Korea. A challenge in the empirical analysis is that only a fraction of the demand for public facilities is observed when there is queuing for public facilities due to limited availability. In other words, what is observed in the data is the capacity of public facilities instead of the true demand for public facilities in the presence of excess demand. Therefore, the standard choice model will underestimate the demand for public facilities. In order to deal with the partial observability of the demand, we develop a multinomial logit model with partial observability (hereafter, the PO-logit model) by ad...

Does Citizen Sector-based Preference Relate to Citizen Satisfaction with Public Service Organizations?

“…Among the 3,498 service recipients, 15 percent of parents (512 individuals) had preferences for the public sector, 4% (138) preferred the nonprofit sector, 15% (530) expressed preferences for the for-profit sector, and 66% (2,318 persons) had no particular preferences. The similar percentage of public sector and for-profit sector preferences indicated a stronger predisposition toward the public sector than the nonprofit or for-profit sectors, considering the limited supply capacity of public childcare facilities discussed earlier (Woo & Jun, 2018). The results also showed that 54% of parents with pro-public sector preferences ended up as public recipients, and 66% of those with pro-nonprofit sector preferences ended up as nonprofit recipients.…”

“…This phenomenon can be explained by the contract failure theory, which argues that citizens have a favorable attitude toward organizations with nonprofit status because they are legally prohibited from distributing profit (Hansmann, 1980). Similarly, pro-public sector preferences tend to be observed in the context of Korean public childcare services (Ministry of Health and Welfare and Korea Institute of Child Care and Education [MHW and KICCE], 2018;Woo & Jun, 2018).…”