Abstract
Countrywide statistics suggest that the long-term shortage of places in state preschool institutions (kindergartens) has become gradually less severe over the past few years thanks to population decline, and that in future there will be sufficient places available at pre-schools. Nevertheless at a local level demand is still far outstripping supply in many places, and this is unlikely to change as internal migration and other demographic changes continue.
Our analysis of financial costs and benefits reveals that the shortage of places in preschools in the past decade has led to an undeniable net loss for the public budget. Our analysis demonstrates that the net gain to the public budget from every additional place in pre-school is on average 10,000 crowns per year.
Public financial support for pre-schools would not result in a loss even under very conservative estimates. On the contrary, the net gains are in fact far higher if the indirect and long-term consequences of supporting further places in pre-schools are taken into account.