The economic impact of public expenditure on early childhood care

Policies aimed to the stimulation of services related to early childhood might represent an attention-grabbing instrument to trigger the economic growth and, at the same time, encourage female labour force participation. In this perspective, this paper contributes to the debate on the effectiveness of fiscal policies in increasing the supply and the demand of early childhood and preschool educational services with the aim of providing some suggestion to the policy-maker on this issue. To this aim, we developed a disaggregate dynamic Computable General Equilibrium model calibrated on a gendered Social Accounting Matrix for Italy. Then two policy scenarios are simulated: the first simulates the introduction of an incentive to the production of early childhood services, the second assumes an increase in the demand of childhood services by households supported by government conditional cash transfers.