American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Upping the Ante: The Equilibrium Effects of Unconditional Grants to Private Schools
American Economic Review
vol. 110,
no. 10, October 2020
(pp. 3315–49)
Abstract
We assess whether financing can help private schools, which now account for one-third of primary school enrollment in low- and middle-income countries. Our experiment allocated unconditional cash grants to either one (L) or all (H) private schools in a village. In both arms, enrollment and revenues increased, leading to above- market returns. However, test scores increased only in H schools, accompanied by higher fees, and a greater focus on teachers. We provide a model demonstrating that market forces can provide endogenous incentives to increase quality and increased financial saturation can be used to leverage competition, generating socially desirable outcomes.Citation
Andrabi, Tahir, Jishnu Das, Asim I. Khwaja, Selcuk Ozyurt, and Niharika Singh. 2020. "Upping the Ante: The Equilibrium Effects of Unconditional Grants to Private Schools." American Economic Review, 110 (10): 3315–49. DOI: 10.1257/aer.20180924Additional Materials
JEL Classification
- I21 Analysis of Education
- I22 Educational Finance; Financial Aid
- I25 Education and Economic Development
- I28 Education: Government Policy
- L22 Firm Organization and Market Structure
- L26 Entrepreneurship
- N75 Economic History: Transport, Trade, Energy, Technology, and Other Services: Asia including Middle East