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Designing and Costing Early Childhood Education (ECE) Service Expansion for Maximum Impact

© UNICEF/UN0696898/Basak Nur Yirmibesoglu

Investing in ECE is a strategy for fostering child development that sets children on a path for a more equitable future. The formative years of early childhood are uniquely influential, with rapid brain growth shaping cognitive, physical, social, and emotional capacities crucial for lifelong success. Quality ECE can nurture the development of these skills, not only enhancing school readiness but also lowering the risk of school dropout, and educational disparities between children from different backgrounds. Such investments yield significantly higher returns compared to compensatory measures in later stages of life, making ECE a strategic and economically sound investment. Therefore, many countries are looking at expanding early childhood education to greater proportions of their populations.

Assessing the distributional impact and expenses associated with different financing and institutional arrangement models can support policy-makers to find the best fit for their context. This analysis enables governments to gauge the financial implications of scaling up existing programs or launching new ones, while also facilitating comparisons of costs and benefits. Such evaluations are essential for understanding the affordability and sustainability of expansion, identifying key cost components, and contrasting different expansion scenarios in terms of their effects on children and associated expenses. 

Crucially, this process should highlight disparities in access, particularly where disadvantaged children are excluded due to fees or additional service costs borne by households. Recognizing these inequalities is imperative for ensuring equitable access to ECE services. 

Development Analytics has led numerous ECE-related research projects, collaborating with organizations like the World Bank, UNICEF, and others. Our studies, including simulation models, estimate the impact and costs of ECE expansion policies. These models, presented through interactive tools, empower stakeholders to compare scenarios and make evidence-based decisions, fostering inclusive development.

A number of these projects focused on broadening ECE services, for which we developed simulation models to estimate the potential impact and costs of different ECE expansion policies aiming to enhance supply of and/or demand for ECE services. These simulation models allowed stakeholders and policymakers to compare and contrast between different scenarios such as ECE capacity expansion through diverse models, and the provision of subsidies to ECE providers and enable decision making using an evidence-based approach. The models are presented through interactive and flexible tools, allowing for adjustments to certain policy decisions.

Our Approach

ECE services are delivered through a diverse group of entities, including public providers, municipalities, or private providers. The financing of these services varies between countries and providers. For example, public services can be fully funded by the government or they can also charge certain fees to households, while private services may rely on household funding or partial government support. These different provision options and financing schemes have significant affordability implications for households and, consequently, children's access to ECE services.

  • We estimate the impact of different ECE policies such as capacity expansion scenarios and subsidy provisions, building simulation models that use the data from the specific country context and reflecting the situation related to ECE in the country. By gathering data from providers on unit costs and prices, from nationally representative household surveys on access to ECE, and from official statistics on existing levels of national level enrolment rates, numbers of teachers, and classrooms, we calculate the total cost of achieving a specific target net enrollment rate through various capacity expansion scenarios. While undertaking such a costing exercise we further provide a breakdown of key cost elements, including set-up expenses and ongoing operational costs, shedding light on the financial requirements of capacity expansion efforts. Considering that different funding options affect households differently, we also estimate the impact on access for children in various income brackets for each scenario.

  • We present our simulation model through an interactive dashboard, enabling policymakers to adjust parameters and instantly view the results. This approach facilitates informed decision-making regarding ECE expansion and financing strategies. The users can continuously benefit from the analysis and are not restricted by static reports and can adapt strategies based on evolving circumstances and needs.

Case Studies

Development Analytics has extensive experience in devising simulation models to assess the anticipated impact of social policies and programs on population and child outcomes, along with calculating the total costs associated with such policies. Regarding ECE policies, below are examples of projects undertaken by DA, utilizing simulations to estimate the impact of different ECE policies:

Early Childhood Education (ECE) Costing Analysis in Türkiye

  • Over the past decade, Türkiye has experienced substantial growth in its ECE capacity, fueled by investments from both the public and private sectors. While the increase in the number of institutions offering ECE services in Türkiye has resulted in higher enrolment rates of 5-year-olds, enrolment rates for 3 and 4-year-olds has remained low. Moreover, enrollment rates across all age groups, including 5-year-olds, still fall below OECD averages. Government planning documents continuously emphasize the need to enhance access to ECE services across these age groups.

  • As part of our project for the Ministry of National Education of Türkiye and UNICEF Türkiye, we developed a simulation model to estimate the total costs associated with expanding ECE services across various scenarios and evaluate their distributional impact. This simulation model was integrated into an interactive and adaptable Excel-based tool, leveraging data on current ECE access, pricing from both public and private providers, and unit costs of setting up and operating ECE services. By empowering users to adjust policy parameters, the Excel model allows exploration of the effects of different scenarios on enrollments and total costs. The tool is built upon UNICEF's ECE Accelerator Simulation Model adding various features and expanding the existing model in order to reflect the situation in Türkiye as well as adding a distributional analysis component.

  • As part of this project, in addition to the tool and its accompanying report we also prepared another comprehensive report titled “The Systematic Analysis of the ECE Sub-Sector in Türkiye” delving into an analysis of Türkiye's ECE system, examining the broader enabling environment, and key action areas. 

  • The findings from both reports and the interactive tool were presented to MoNE experts, and the tool have been delivered to MoNE for future use in supporting the formulation of capacity expansion policies for ECE services. Similar tools can be developed for other countries using their national statistics, household surveys, and pricing and costing data.

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© UNICEF/UN0696932/Basak Nur Yirmibesogl

Ex-Ante Policy Evaluation of Supply and Demand Side Childcare Subsidies

  • Public financing of privately provided child care can allow for access to these services in places where public provision and capacity are low. However, the mechanisms of subsidy delivery will affect who benefits, and the overall cost-effectiveness of such subsidies. 

  • In this respect, we carried out this study for the World Bank, for estimating the benefit incidence of expanded capacity and enrollments resulting from different child care subsidy mechanisms in Türkiye. The study considers one-time investment grants and monthly operational grants to child care providers, combinations of investment and operational grants, and demand-side vouchers to households.  We built a simulation model to estimate the impact of these different policy options by combining a supply-side provider level and a demand-side household model in one simulation. The model is applied to empirical data from child care centers and households in Türkiye. The results reveal that the choice of the subsidy delivery model has a strong bearing on the benefit incidence and cost-effectiveness of the subsidy. 

  • The proposed simulation model can be applied in other country contexts, with the country specific data on the costs and pricing structure of child care providers, as well as household survey data including information on household welfare and child care utilization.

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© UNICEF/Tunisia/2021/Paula González

If you would like to get in touch with us and discuss the details of carrying out such a study in your country, please click to arrange a meeting with our expert team.

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