For-profit preschools pay lower wages – but staff have better health outcomes
Wages, worker qualifications and indicators of staff health differ between municipal, for-profit and non-profit preschools in Sweden. A new study by Karin Edmark (Swedish Institute for Social Research, Stockholm University) and Lovisa Persson (Research Institute of Industrial Economics (IFN) and Kristianstad University) compares the provider types using nationwide register data covering the period 2001–2020.
Illustration photo of a preschool setting. The study is based on register data covering staff in Swedish preschools between 2001 and 2020. Photo: Mostphotos.
The study is based on linked register data covering employees in Swedish preschools. The results show that:
- For-profit preschools employ workers with lower qualifications across all observed dimensions. They are less likely to employ preschool teachers, and their staff are younger and have less work experience. Wages are also somewhat lower, and workers who switch to a for-profit preschool receive a smaller wage increase than those moving in the opposite direction.
- Non-profit preschools (such as parent cooperatives) also employ relatively few preschool teachers. However, the pattern differs from that of for-profit providers. Staff have more work experience and higher upper secondary grades, and wages are on average higher than in municipal preschools.
- Both for-profit and non-profit preschools have lower sick leave rates and lower use of mental health-related medication among staff than municipal providers. The findings suggest that these better health outcomes are largely related to the generally smaller size of private organizations.
The preschool sector stands out
The preschool workforce is predominantly female and is characterized by relatively low wages and high levels of sick leave compared with other sectors of the economy. For example, the sick leave rate among preschool workers is 23 per cent, compared with 16 per cent in the school sector. The study provides new evidence on how working conditions differ depending on the organizational form of the employer.
Another key finding is that competition from for-profit providers does not appear to increase wages overall. One might expect a larger number of employers to strengthen competition for workers and thereby raise wages. However, the study finds no such pattern. One possible explanation is that for-profit providers tend to recruit younger and less qualified workers, which may reduce competitive pressure on wages.
“We expected a larger number of employers to result in higher wages through increased competition for workers. Instead, our findings suggest that for-profit preschools recruit younger and less qualified staff, reducing the pressure on municipalities to raise wages,” says Karin Edmark.
About the study
The study is published in the Journal of Economic Policy Reform. It is based on linked register data covering all employees and workplaces in the Swedish preschool sector between 2001 and 2020. Read the full article/study:
Quasi-markets in preschool – a study of worker wages, qualifications and health
Contact
Karin Edmark
Senior Lecturer in Economics
Swedish Institute for Social Research (SOFI)
Stockholm University
Lovisa Persson
Senior Lecturer in Economics
Department of Law and Economics
Kristianstad University
Last updated: 2026-08-04
Source: Swedish Institute for Social Research