Understanding Education Markets: Experimental and Observational Evidence from Pakistan

Harvard University, Cambridge MA

Investigators

Abstract

Project Summary The PI's propose three studies to better understand the educational market in developing countries. Increasingly, these markets are characterized by substantial and varied school choice, even for children from poor backgrounds. The studies combine a unique dataset with non-experimental and experimental variation to isolate supply and demand factors. The dataset is a four-year, matched panel (the "LEAPS" data) collected by the PIs that uses multiple surveys and exams to cover the educational universe - schools, teachers, parents, and children - for over a hundred distinct educational markets (villages) in Pakistan. The first study examines how the education market, especially schools, is affected by the introduction of report cards on relative school and student performance. It takes advantage of an experimental intervention that provided learning quality information via school and child standardized test scores to parents in half of the villages in the LEAPS sample. The extensive data permits separate examination of school, teacher, parent, and child responses to the intervention in a general equilibrium context, allowing for an investigation of the effects of the information provision on the entire market and its actors. Moreover, exploiting (non-experimental) variation across school quality and type provides more general insights into the underlying economic responses of these actors. The second study investigates the market-wide impact of making public providers more responsive to parental demand. The study utilizes an intervention carried out by the government that reorganized public school councils in a partially randomized subset of the LEAPS villages, making them more representative of the parent body and providing them with additional resources. An additional survey round is proposed to examine the medium-term impact of the intervention. The study will examine both the impact on public school outcomes and, given that private schools did not receive this support, the potential crowding-out effects of increased public subsidies. The third study examines parental decision-making and educational investments for children. An initial examination of the LEAPS data shows parents invest significantly more in children they perceive to be more able. This study combines novel ability perceptions and educational investment data for each child over the four-year period of the survey with exogenous variation in perceptions due to the child-level report cards. The study examines the extent and nature of parental investment reallocation from children revealed (through the report cards) to be more or less able than what parents initially believed. Intellectual Merit The proposed studies contribute to our understanding of the workings and evolution of the educational markets in developing countries. The combination of feasible and scalable experimental interventions, which allow for improved empirical identification while remaining cognizant of external validity, and comprehensive longitudinal data, which permit an examination of all salient actors in the education market, makes these studies unique and valuable. While we focus on one developing country and specific interventions, the broader goal is to generate insights and uncover economic behaviors that are generalizable to other settings. Each study contributes to specific research areas, in particular to a growing literature on using information to improve service delivery, the efficacy of systems that directly empower beneficiaries of public services, and within-household resource allocation. Broader Impact All three studies directly address questions of policy import. Information-based accountability and the empowerment of communities to manage local public goods have been prominent in recent development policy. Moreover, the design of increasingly popular public redistribution policies depends crucially on the structure of family allocations and parental decision-making. The researchers plan to disseminate the broader findings of these studies through opinion pieces, policy briefs, and conferences that engage policy-makers. Also, in order to facilitate further research, particularly by students and policy analysts, the novel and comprehensive data gathered will be made publicly available. The first year of the data is already accessible on the project website, and the researchers plan to make subsequent rounds available along with detailed documentation to facilitate outside use.