Building an ex-ante simulation model for estimating the capacity impact, benefit incidence, and cost effectiveness of child care subsidies in Turkey

This paper uses a simulation model to estimate the impact of various forms of childcare subsidy programmmes in Turkey. The mechanisms of childcare subsidy delivery affect who benefits, and the cost-effectiveness of these subsidies. Therefore, the authors’ estimations consider various supply-side mechanisms such as provider investment and monthly grants, as well as demand-side mechanisms such as the provision of vouchers to households. The results reveal how a demand-side voucher system is the least cost-effective subsidy delivery model in Turkey, a country where significant supply-side constraints exist in the market. Still, there are costs and benefits of each type of subsidy mechanism, which are further discussed in the article. The simulated estimations may be replicated in other countries to compare and contrast various childcare subsidy mechanisms.