Can workers switch it up?

The Swedish preschool sector, which is heavily dominated by a female workforce, is marked by low wages and poor health outcomes. Our study shows that preschools’ organizational form is significantly associated with hiring practices, wage-setting, and worker health outcomes. For-profit preschools tend to hire younger, less qualified, and less experienced workers, and pay lower wages even after controlling for observable and unobservable worker characteristics. Non-profit providers hire fewer preschool teachers and younger workers, similarly to the for-profits, but on the other hand tend to hire workers with more experience and higher upper secondary school grades. Wages in non-profits are, on average, higher than in for-profit and municipal preschools. Worker health outcomes are better in non-profit and for-profit preschools compared to municipal preschools. Overall, the results suggest that worker composition, wages and health outcomes differ between employer types. Whether these differences matter for preschool quality is a relevant topic for future research.