While there is very little empirical literature on the response  of private providers to increased public supply of child care, there exists a considerable literature on the effect of public  (or subsidized) child care provision on maternal labor supply,  which is a related but still distinctly different issue. Although the reported results from this strand of the literature are quite heterogeneous, most recent studies (applying quasi experimental approaches) find that increased public financing of child care tends to crowd out existing child care provision, quantitatively ranging from moderate crowd-out effects (e.g. Baker, Gruber, & Milligan, 2008) to almost complete crowd out with practically no effect on maternal labor supply (e.g. Cascio, 2009; Havnes & Mogstad, 2011). However, these studies are not always able to distinguish whether public child care provision crowds out private provision of formal or informal child care. While this distinction is irrelevant for the question of maternal labor supply, it is of course crucial if the policy aim is to increase the total supply of formal child care in order to reap the long-term benefits of increased preschool attendance.  The rest of the paper is organized as follows. In the next section we provide information about the institutional characteristics that are important for the implementation of our empirical analysis, and provide a detailed description of the data. The empirical method and results are presented and discussed in Sections 3 and 4, respectively. In Section 5 we present a simple theoretical framework to guide the interpretation of our empirical results, where we relate the key model assumptions to the Brazilian reality. Finally, some concluding remarks are given in Section 6.