Kindergartens and childcare

The CMD has proposed using matching markets to improve the allocation of kindergarten places to children in Victoria. A similar market to allocate places in childcare centres could follow.

Kindergarten, or preschool, is a non-mandatory one-year programme for children the year before they start school. Kindergarten admission is managed at a local level, often by local councils or cluster managers. Each kindergarten has a limited number of places available each year and the relevant council or cluster manager determines which children have a higher priority if demand exceeds supply. In most cases the application process has been centralised, allowing parents to fill only one application form for all centres within the same council or relevant area. Each council then allocates places based on family preferences, priorities and the capacity of each centre.

These processes do not take advantage of the latest developments in matching theory. This creates inefficiencies, the application process takes several weeks, the allocation process does not fully respect priorities, and in some situations parents need to misreport their preferences in order to avoid losing priority. Using matching theory techniques could considerably reduce the amount of time required to offer places to children, reduce waiting time for parents and yield savings for councils. The matching system would fully respect priorities, ensuring no child loses a place to another child with lower priority. Finally, possible gains from misreporting preferences would be eliminated, making the application process easier for parents and allowing councils to better understand the demand for their centres.