High-quality daycare has the potential to be a “triple-win”: fostering child development, increasing parental income, and increasing daycare profits in a mostly female workforce. However, in many low- and middle-income countries, the daycare industry is largely unregulated. Quality is often low especially in poor communities—and raises child safety and health concerns. Low quality may also explain parental hesitancy to use paid care despite a demonstrated need. We work with a social franchising organization that aims to improve daycare quality in Kenyan urban informal settlements. Through a cluster randomized intervention, we find the social franchising model substantially increases daycare quality and meal provision. We also find benefits among competitor firms that did not enroll in the program, suggesting that social franchising maybe a promising approach to generate widespread benefits. Higher quality did not lead to either higher prices or firm revenues, and enrollment also did not change, perhaps because parents have a low willingness to pay or cannot easily observe quality.
