Quality vs. Quantity: Evaluating the Impact of Childcare Expansion on Children’s Educational Outcomes in Brazil

The early years are crucial for child development, with long-term impacts across various domains. While early childhood education and care (ECEC) policies aim to mitigate social inequalities, ineffective implementation can widen these disparities. This study assesses the impact of the rapid expansion of childcare through public-private partnerships (PPP) for children aged 0 to 3 years in São Paulo, Brazil, on their academic performance at ages 8 to 11. While the PPP model facilitated quicker capacity expansion, centers operating under this scheme were reported to have lower structural quality and received only half the per-child funding compared to public childcare centers. Using administrative datasets and a difference-in-differences approach, we estimated the impact of attending PPP centers (versus better-financed and regulated public centers) in the period immediately following the policy implementation on children's later academic outcomes. The results show that, on average, attending PPP centers in the post-policy period was associated with a small but positive effect on educational outcomes, and that this benefit was primarily observed for children who attend for only one year. Conversely, extended attendance (two to three years) correlated with declining test scores, intensifying concerns about prolonged exposure to substandard conditions. Contrary to expectations, children in disadvantaged areas did not fare worse during the policy expansion than those in wealthier regions, with positive effects concentrated in moderately disadvantaged neighborhoods. These findings underscore the importance of considering variability in ECEC policy outcomes to ensure they do not inadvertently create cumulative disadvantages and to guide policy adjustments for improving these programs.