Correcting public service misallocation through intermunicipal mobility: evidence from Italy’s RRF childcare program
This paper demonstrates that while Italy's RRF childcare investments fail to meet coverage targets in many small municipalities due to rigid administrative allocation, fostering intermunicipal mobility to access neighboring excess capacity can significantly reduce spatial inequalities without requiring additional infrastructure.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
Imagine a world where public services, like schools or hospitals, are only allowed to exist inside invisible walls drawn on a map. These walls are administrative borders, the lines that separate one town from another. In the real world, however, people don't live inside boxes; they commute, shop, and play across these lines. When we build public facilities strictly based on these rigid borders, we often end up with a messy puzzle: some towns have empty seats in their schools while children in the next town over have nowhere to sit. This is a classic problem in economics and urban planning called "spatial inefficiency." It happens because we forget that towns are part of larger, living neighborhoods where resources should flow to where they are needed most, not just where the paperwork says they belong. The big question is: if we can't redraw the map, can we at least let the people move across the lines to fix the imbalance?
This paper tackles that exact question using Italy's massive new investment in nursery schools as a real-life laboratory. The researchers looked at a government program designed to build over 150,000 new childcare spots to help parents return to work. They found that while the plan added a lot of seats, the way the money was handed out—town by town—left a huge mess. Many small towns, especially in the south, didn't get enough spots to meet the national goal, while bigger, wealthier towns ended up with extra seats they couldn't fill. The authors ran a computer simulation to see what would happen if they broke the "invisible walls." They asked: What if a child from a town with no nursery could simply walk next door to a town with empty seats? Their results suggest that if towns made simple agreements to let children cross borders, they could fix the shortages for the vast majority of towns without building a single new building. It's a bit like realizing you don't need to build a new kitchen in every house if you just let neighbors share the one that's already open.
The Story of the Missing Spots
The story begins with Italy's National Recovery and Resilience Plan (NRRP), a huge cash injection from the European Union meant to rebuild the country. A major part of this plan was a mission to build new nursery schools for children aged 0 to 2. The goal was ambitious: every town needed to provide enough spots to cover at least 33% of its tiny tots. Before the plan started, the country was sitting at about 27%, and the gap was huge between the rich north and the struggling south.
The government tried to fix this by giving money to towns that asked for it. They held a contest, inviting towns to submit projects to build new schools. But here's where the plot thickened: the contest didn't work the way the planners hoped. The towns that needed help the most—the tiny ones with very few children and the ones in the south—often didn't apply. Maybe they were too small to handle the paperwork, or maybe they were scared of the future costs of running a school. Meanwhile, bigger towns with more resources applied and got the money.
When the researchers looked at the map after the new schools were built (or at least planned), they saw a lopsided picture. Nationally, Italy was actually doing great; the total number of spots would push the coverage rate up to nearly 40%, well above the 33% target. But if you zoomed in on the individual towns, it was a different story. About 58% of all Italian municipalities—mostly the small ones—would still be below the target. It was as if the government had filled a swimming pool with water, but the water was all in the deep end, leaving the shallow end completely dry.
The "Magic" of Moving Across Borders
So, how do you fix a pool where the water is stuck in one corner? The authors proposed a clever solution: stop thinking of towns as isolated islands and start thinking of them as neighbors who can share.
They built a simple model to test this idea. Imagine two towns: Town A is "under-served," meaning it has zero nursery spots for its kids. Town B is "over-served," meaning it has plenty of spots and even some empty ones. In the current system, a child in Town A is stuck, and a spot in Town B sits empty. The researchers asked: What if Town A and Town B made a deal? What if the kids from Town A could cross the border to sit in the empty chairs in Town B?
Using a mathematical approach, they showed that this "intermunicipal mobility" would be a game-changer. In their "best-case" simulation, where towns were willing to share all their extra seats, nearly two-thirds of the towns that were currently failing the target and were not isolated would suddenly pass it. Specifically, about 60.5% of the under-served municipalities would be able to close their gap completely just by letting kids move. They wouldn't need to build a single new school; they just needed to let the kids move. The total number of spots involved in this sharing would be around 32,600.
However, the authors knew that in the real world, towns might be a bit more protective of their resources. They ran a second, more realistic simulation called the "Constrained" scenario. In this version, a town would only share its extra seats if it had already made sure all its own local families had a spot. They also considered that some towns might have waiting lists for public nurseries, meaning they couldn't spare any seats at all.
Even with these stricter rules, the magic still worked, though a little less perfectly. In this scenario, about 24,400 spots would be shared across borders. This would still help a massive number of towns close the gap. The simulation showed that while some towns would still be stuck—specifically the 15.3% of under-served municipalities that are "isolated" and don't border any town with extra seats—the vast majority of the inequality could be smoothed out just by allowing movement.
The Catch and the Future
The paper doesn't pretend this is a solved problem. The authors point out that right now, many towns have rules that say, "Only our residents can use our schools." To make this sharing work, those rules would have to change. The government might even need to step in and force towns to reserve a few seats for their neighbors, just like a landlord might be required to keep a room available for a specific purpose.
There's also a group of towns that this plan can't help: the "isolated" ones. These are tiny villages in the middle of nowhere that don't border any town with extra seats. For them, the simulation shows that no amount of sharing will work. The authors suggest that for these specific cases, the central government might need to build new facilities directly, just as they did after World War II to rebuild the country's schools.
Ultimately, this paper suggests that we don't always need to build more to solve a shortage. Sometimes, the solution is just to stop drawing lines on the map and let the resources flow where they are needed. By letting children move between towns, Italy could potentially turn a patchwork of shortages and surpluses into a balanced system, ensuring that every child, no matter how small their town, has a place to learn and grow.
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