Quality Differences of Public, For-Profit and Nonprofit Providers in Scandinavian Welfare? User Satisfaction in Kindergartens

Research on differences between public, for-profit, and nonprofit providers of welfare services has provided mixed findings, depending on welfare state arrangement, regulation, and service area. This paper’s objective is to study the differences between public, nonprofit (cooperatives and other nonprofits), and for-profit welfare providers from the perspective of the users in the tightly regulated Scandinavian context. We ask how the users perceive the providers from different sectors differently and how this variation can be explained. The study relies on a large-scale survey carried out in 2015 in the city of Oslo, Norway. From the survey, we identify the two main results. First, despite limited differences, users of nonprofit kindergartens are generally more satisfied than users of for-profit and public kindergartens. Second, an important explanation for variations in user satisfaction among kindergartens is identified in a pocket of regulatory leniency: the quality of food service. This is the only expense that varies among kindergartens in Norway. These results indicate that more lenient regulations could potentially increase provider distinctiveness. Based on the existing literature, we discuss why nonprofit providers seem to fare better in the minds of users than public and for-profit providers.