The Equity Imperative: Financing Early Childhood Care and Education Systems to Reach All Children

The way early childhood care and education (ECCE) is financed can either reduce or exacerbate existing inequalities. As domestic financing becomes the primary engine of early childhood care and education (ECCE) investment, governments must focus on two fundamental questions: How is ECCE prioritized in domestic budgets? And how is financing designed and targeted to reach the groups we are trying to serve? Drawing on a recent UNESCO working paper co-authored with Dr. Paula Razquin, this post outlines four strategies that governments can adopt to advance equity, quality, and affordability in ECCE financing.

Strategy 1: Adopt a Rights-Based Approach and Align Financing with Legal Frameworks

Legal frameworks matter. In low- and lower-middle-income countries, at least one year of free and compulsory pre-primary education is associated with higher primary school completion rates, and children in those systems are more likely to be developmentally on track. Yet only 46 of 194 countries currently have free and compulsory pre-primary education (UNESCO & UNICEF, 2024). An important development to watch is the Optional Protocol to the UN Convention on the Rights of the Child under discussion, which would make early education an explicit right, including one year of free, public pre-primary education.

In practice, governments are putting ambitious policies in place without funding them to adequate levels. Legal frameworks must be aligned with financing realities: where ECCE is declared compulsory, it must also be free. This means costing national ECCE plans, coordinating budgets across ministries and sectors, and mainstreaming ECCE into national policy planning so that it is consistently visible and resourced. Brazil stands out as a leading example, having established a legal entitlement to ECCE backed by stable, redistributive financing that directs resources to the geographic areas that need them most.

Strategy 2: Prioritize ECCE in Domestic Education Sector Planning and Budgets

Existing financing is inadequate at both national and global levels. The Tashkent Declaration (2022) recommends that governments allocate at least 10% of education expenditures to pre-primary education. Most countries are far from that benchmark. On average, countries spend less than 7% of education budgets on pre-primary, while low-income countries spend closer to 2%. Internationally, less than 1.4% of the global education aid budget reaches pre-primary education (UNESCO & UNICEF, 2024; TheirWorld, 2024).

With diminishing international assistance, the primary focus must be on what domestic governments can do. Current public funding is low and often poorly targeted. Financial support needs to reach children in the early years who are most often left behind: children under three, children with disabilities, children affected by conflict and crisis, and children from ethnic and linguistic minority backgrounds. Countries like Nepal demonstrate that when ECCE is mainstreamed into education sector planning, strong progress in expanding provision follows. This is also where outcomes-based financing can play a catalytic role by making ECCE more visible in budget processes, shifting the focus to results, and building the evidence base to guide more intentional financing.

Strategy 3: Design Public Subsidies to Improve Equity, Quality, and Affordability

Household contributions remain a significant barrier to ECCE — particularly for the most vulnerable families and for children under three. Children from the wealthiest families are seven times more likely to attend early childhood education than those from the poorest. In Liberia, children may be required to drop out when families cannot pay fees. In Tanzania, parents often pay even though pre-primary is officially free (Kim et al, 2022).

The evidence on well-designed subsidies is encouraging. Countries that target fee subsidies to specific disadvantaged groups have ECCE participation rates approximately 13 percentage points higher than those without such subsidies (OECD, 2024). We can learn from good examples around the world: Chile subsidizes families in the bottom three income quintiles; Colombia caps fees for home-based childcare; and Canada is expanding Quebec’s flat daily fee model nationwide. In addition to addressing fees, conditional grants can incentivize quality improvements and expand services for children with disabilities – linking funding to outcomes rather than inputs alone.

Strategy 4: Strengthen Data and Monitoring Systems

There is a great deal we do not know about ECCE financing. Tracking financing over time is extraordinarily difficult given that 55 countries have not reported any pre-primary expenditure data since 2014 (UNICEF, 2019). Data challenges are compounded by the multi-sectoral nature of ECCE, weak coordination across ministries, large levels of private provision. We also know little about the impact of different financing approaches.

This is an area where outcomes-based financing (OBF) can contribute by embedding data collection and impact tracking directly into the financing architecture. Morocco illustrates the potential: through child-sensitive budgeting and simulation modeling to guide resource allocation toward rural areas and underrepresented girls, the country has achieved substantial gains in ECCE access in recent years.

Conclusion

The four strategies outlined here offer a practical framework for domestic financing of ECCE: align legal commitments with financing, prioritize ECCE in domestic budgets, design subsidies that reach the most vulnerable, and build the data systems needed to track impact. Innovative financing like OBF is a valuable tool to complement to public investment and strengthen the focus on results. When prioritization and alignment of funding are achieved, countries can make real and lasting progress for young children.

This blog post draws from a presentation at a webinar on “Equity by Design in Outcomes-Based Financing for Early Childhood Care and Education,” organized by the Oxford Government Outcomes Lab, the Education Outcomes Fund, and NORRAG on February 18, 2026. The full recording is available here.