Indicators for a needs-based resource allocation in early childhood education: regional data as valid proxies for setting level needs?

The main purpose of the study is to investigate whether regional data are able to finance early childhood education settings according to their need. Against the background of constraints in public resources on the one hand and the challenge to tackle educational inequality on the other hand, the current academic and political discussion regards needs-based resource allocation to be a promising answer to both demands. This requires the indicators used to allocate resources to accurately capture the characteristics that result in a greater financial need of educational institutions with respect to educational inequalities. In this regard, policy makers often face a dilemma between available data on the one hand and the quality of these data on the other hand. A possible solution to this dilemma could be the use of statistical data on the level of city districts as an objective and non-manipulable indicator that is easily at hand. However, the employment of these data is only valid if the districts’ social composition is similar to the composition of the settings in those districts. I employ data on different needs indicators on both levels in one municipality and analyze their correlation. The results indicate that the characteristics of the districts and their respective preschool settings do not match sufficiently to be an adequate indicator in needs-based resource allocation. (DIPF/Orig.)