To construct the funding amount variables, we use data on the total amount of funding during the project period (2009-2013), which was collected only in the 2013 survey. For the expenditure variable, we use annual expenditure data on teacher salaries, which were collected separately in 2010 and 2013. Table 2 shows that during the project period, the largest financial support (beyond the approximately 77 million rupiah project funds per center) came from government sources (22.25 million rupiah). Project playgroups received modest financial support from parents (4.70 million rupiah) and little support from non-governmental sources (0.60 million rupiah) during the project period. In addition, the average project playgroup significantly increased the share of annual expenditure on teacher salaries from 15% in 2010 to 18% in 2013.<sup>15</sup> Our second predictor category is playgroup quality, which is captured using three variables: (i) observed quality in the playgroup, (ii) proportion of teachers with a post-secondary degree, and (iii) proportion of teachers with teaching experience in early childhood education.

Our measure of observed quality was collected only in 2013 and used the Early Childhood Environment Rating Scale – Revised (ECERS-R) (Harms, Clifford and Cryer 2005). The ECERSR uses classroom observations, playgroups in this case, to assess the various interactions that occur between and among teachers, students, and parents. Each playgroup was assessed by two raters on a 7-point Likert scale, ranging from 1 = inadequate, 3 = minimal, 5 = good, to 7 = excellent.

In an effort to align the ECERS-R data with the reality of the Indonesian context, we compared ECERS-R to Indonesia’s national standard and found that 28 out of 43 ECERS-R items were discussed in the national standard (see Table 4 in Brinkman et al. 2017). We, therefore, calculate playgroup quality using only the 28 items that were found to be common between ECERS-R and the national standard. The average playgroup in our analytic sample has a score of 3.09 – which corresponds to minimal quality on the ECERS-R scale.<sup>16</sup> We also measured playgroup quality using teacher characteristics. On average, the proportion of teachers with postsecondary education marginally increased from 20% in 2010 to 23% in 2013, and the proportion of teachers with teaching experience in early childhood education significantly increased from 31% in 2010 to 36% in 2013.

The third category is market condition, which we measure using four variables: (i) number of kindergartens per 100 children in the village, (ii) number of other playgroups per 100 children in the village, (iii) distance to the village center, and (iv) distance to the nearest neighboring playgroup. The first and second variables capture the extent to which the project playgroups are faced with competition from complementary services (kindergartens) and substitute services (other playgroups). While several types of early childhood services exist in Indonesia, the two most common types of pre-primary education are playgroups and kindergartens. Playgroups cater to children ages 3-4 with a focus on play-based learning while kindergartens are intended for children ages 5-6 with a focus on academic preparation for primary school. Thus, for the project playgroups, other playgroups operating in the same village but not funded by the project can be seen as substitutes while kindergartens operating in the same village function as complements. Table 2 shows that, on average, there were more kindergartens than playgroups. In 2010, there were 0.71

> 15 Appendix Table 3 reports these numbers separately for open and closed playgroups between 2010 and 2013. Appendix Table 4 examines this information only for open centers for which the data are available from 2013 to 2016. Appendix Table 5 reports teacher salaries.

> 16 While we also collect data on student outcomes at the center level using the Early Development Instrument (EDI) (Janus and Offord 2007), which measures children’s school readiness and focuses on five domains: physical health and well-being, social competence, emotional maturity, language and cognitive skills, and communication and general skills We do not apply these as a measure of playgroup quality as it could reflect sorting on the part of children and their families.

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