The Socio-Economic Status of Neighbourhoods and Access to Early Childhood Education

Good-quality early childhood education and care (ECEC) has been shown to benefit children from low socio-economic backgrounds the most, starting from a very early age. Yet in many countries ECEC usage by such children is lower than that of their more fortunate peers. We study inequalities in the availability and affordability of local ECEC services in Hungary across neighbourhoods of different socio-economic status because these factors have been found to be key for ECEC uptake in many settings. Hungary is an interesting case because the potential to reduce child poverty is high. We find that publicly-funded ECEC availability for children under age 3 is lower in poorer areas in Hungary even after controlling for proxies of demand, regional effects and the known issue of low ECEC density in smaller settlements. Formal ECEC through the private sector is also scarcer in poorer areas but we do not find evidence that it is less affordable than in richer areas using a stylised family affordability metric. Our study not only expands the geographical dimension of the literature but also adds particular value by studying the private-sector pricing of ECEC services in the context of demand unsatisfied by the public sector.