Understanding day care enrolment gaps

We document gaps in day care enrolment by family background in a country with a universal day care system (Germany). Research demonstrates that children of parents with lower educational attainment and children of migrant parents may benefit the most from day care, making it important to understand why such enrolment gaps exist. We use a unique data set that records both parental demand for day care and actual usage to investigate determinants using complementary decomposition and quasi-experimental analyses. Our decomposition shows that (a) differences in demand are important but do not fully explain the enrolment gaps, (b) large shares of the gaps are unexplained, especially for migrant parents, and (c) the heterogeneous effects of access barriers (shortages and fees) may explain some of the remaining gaps. Our quasi-experimental design finds that reducing shortages significantly decreases the enrolment gap by parental education but not by parental migrant status. Similarly, using the synthetic control method we show that a reduction of fees reduces only the gap by parental education. We discuss implications for policy.