Forthcoming, Review of Economics and Statistics
NBER Working Paper W23870. Link to paper: [PPRS_Jan31_2020.pdf]
Abstract: Governments are increasingly partnering with the private sector to improve the delivery of education. We evaluate an innovative program that enlisted local entrepreneurs to open and operate new schools in 200 randomly selected, underserved villages in Sindh, Pakistan. School operators received a per-student subsidy from the local government to provide tuition-free primary education, and in half of the treated villages operators received a higher subsidy for female students. Management of these schools was highly decentralized, with school operators permitted to tailor inputs to local demand. The program increased enrollment in treatment villages by 31 percentage points, and test scores by 0.64 standard deviations, with no difference by gender or across the two subsidy schemes. Treatment effects are driven primarily by the establishment of schools in villages where they were previously absent, though program schools also improve educational outcomes even when nearby government schools are available. To gain greater insight into program school efficiency, we estimate a structural model of the demand and supply for school inputs. This exercise reveals that program schools selected inputs similar to those of a social planner who internalizes all the education benefits to society.
Authors: Felipe Berrera-Osorio, David S. Blakeslee, Matthew Hoover, Leigh L. Linden, Dhushyanth Raju, and Stephen P. Ryan