Does competition from for-profit firms raise wages for preschool workers?

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Authors: Karin Margret Edmark, Lovisa Persson
Cited by: 0
References: 39

Abstract

Abstract We study the wage effects of an expansion of for-profit preschools in Sweden, which followed after a reform in 2006 removed municipalities’ right to veto private entry. The expansion decreased preschool employers’ monopsony power by increasing the number of alternative employers. We use a differences-in-differences event study design to evaluate the impact on preschool workers’ wages, and find no evidence that wages were affected. In the context that we study, the absence of an upward wage effect may be explained by the entering for-profit firms’ propensity to hire less qualified, lower-paid staff, and workers from other sectors of the economy than the preschool sector. JEL classification H44, I2, J31, J42

Fields of Study & Subjects

Early Childhood Education and Development Economic Policies and Impacts School Choice and Performance

Publication details

Journal / source
Journal for Labour Market Research
Publisher
Springer Science and Business Media LLC
Volume
60
Issue
1
Publication date
27 April 2026
Language
EN