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The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India

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  • Karthik Muralidharan
  • Venkatesh Sundararaman
Abstract
We present experimental evidence on the impact of a school choice program in the Indian state of Andhra Pradesh (AP) that provided students with a voucher to finance attending a private school of their choice. The study design featured a unique two-stage lottery-based allocation of vouchers that created both a student-level and a market-level experiment, which allows us to study both the individual and the aggregate effects of school choice (including spillovers). After two and four years of the program, we find no difference between test scores of lottery winners and losers on Telugu (native language) and math, suggesting that the large cross-sectional test-score differences between public and private school students on these subjects mostly reflect omitted variables. However, private schools spent significantly less instructional time on Telugu and math, and instead taught more English, science, social studies, and Hindi. Averaged across all subjects, lottery winners scored 0.13`sigma` higher, and the average causal impact on test scores of attending a private school was 0.23`sigma`. Further, the mean cost per student in the private schools in our sample was less than a third of the cost in public schools. Thus, private schools in this setting deliver (slightly) better test score gains than their public counterparts, and do so at substantially lower costs per student. Finally, we find no evidence of spillovers on public-school students who do not apply for the voucher, or on private school students, suggesting that the positive impacts on voucher winners did not come at the expense of other students.

Suggested Citation

  • Karthik Muralidharan & Venkatesh Sundararaman, 2013. "The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India," NBER Working Papers 19441, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19441
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    Cited by:

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    2. Mark Rosenzweig & Ahmed Musfiq Mobarak, 2013. "Risk, Insurance and Wages in General Equilibrium," Working Papers 1035, Economic Growth Center, Yale University.
    3. Asim,Salman & Chase,Robert S. & Dar,Amit & Schmillen,Achim Daniel, 2015. "Improving education outcomes in South Asia : findings from a decade of impact evaluations," Policy Research Working Paper Series 7362, The World Bank.
    4. Agha Ali Akram & Shyamal Chowdhury & Ahmed Mushfiq Mobarak, 2017. "Effects of Emigration on Rural Labor Markets," NBER Working Papers 23929, National Bureau of Economic Research, Inc.
    5. Lant Pritchett & Martina Viarengo, 2015. "The State, Socialisation, and Private Schooling: When Will Governments Support Alternative Producers?," Journal of Development Studies, Taylor & Francis Journals, vol. 51(7), pages 784-807, July.
    6. Servaas van der Berg & Chris van Wyk & Ronelle Burger & Janeli Kotzé & Marlies Piek & Kate Rich, 2017. "The performance of low fee independent schools in South Africa - What can available data tell?," Working Papers 01/2017, Stellenbosch University, Department of Economics.
    7. Pal, Sarmistha & Saha, Bibhas, 2014. "In 'Trusts' We Trust: Socially Motivated Private Schools in Nepal," IZA Discussion Papers 8270, Institute of Labor Economics (IZA).
    8. Castro, Juan F. & Rolleston, Caine, 2018. "The contribution of early childhood and schools to cognitive gaps: New evidence from Peru," Economics of Education Review, Elsevier, vol. 64(C), pages 144-164.
    9. Eric Bettinger & Michael Kremer & Maurice Kugler & Carlos Medina & Christian Posso & Juan E. Saavedra, 2019. "School Vouchers, Labor Markets and Vocational Education," Borradores de Economia 1087, Banco de la Republica de Colombia.
    10. Singh, Abhijeet, 2015. "Private school effects in urban and rural India: Panel estimates at primary and secondary school ages," Journal of Development Economics, Elsevier, vol. 113(C), pages 16-32.
    11. Centre for Civil Society CCS, 2015. "Meta-Study of Literature on Budget Private Schools in India," Working Papers id:7950, eSocialSciences.
    12. Gabriel Heller Sahlgren, 2014. "Handing Over the School Keys: The Impact of Privatisation on Education Quality," Economic Affairs, Wiley Blackwell, vol. 34(2), pages 196-210, June.
    13. Juan F. Castro, 2020. "Revisiting the contribution of schools to cognitive gaps: Evidence from Peru," Review of Development Economics, Wiley Blackwell, vol. 24(4), pages 1256-1278, November.
    14. Karthik Muralidharan & Venkatesh Sundararaman, 2013. "Contract Teachers: Experimental Evidence from India," NBER Working Papers 19440, National Bureau of Economic Research, Inc.
    15. Miguel Urquiola, 2015. "Progress and challenges in achieving an evidence-based education policy in Latin America and the Caribbean," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-30, December.
    16. Mehtabul Azam, 2017. "Explaining Caste Differences in Private School Attendance," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 1191-1204, November.
    17. Geeta Gandhi Kingdon, 2020. "The Private Schooling Phenomenon in India: A Review," Journal of Development Studies, Taylor & Francis Journals, vol. 56(10), pages 1795-1817, October.
    18. Wamalwa, Fredrick M. & Burns, Justine, 2018. "Private schools and student learning achievements in Kenya," Economics of Education Review, Elsevier, vol. 66(C), pages 114-124.
    19. Alcott, Benjamin & Rose, Pauline, 2017. "Learning in India’s primary schools: How do disparities widen across the grades?," International Journal of Educational Development, Elsevier, vol. 56(C), pages 42-51.
    20. Powell-Jackson, Timothy & Ansah, Evelyn K., 2015. "The indirect effects of subsidised healthcare in rural Ghana," Social Science & Medicine, Elsevier, vol. 144(C), pages 96-103.
    21. Juan F. Castro, 2017. "Revisiting Dynamic Complementarity in the Production of Cognitive Skill and its Implications for a Cognitive Achievement Gap Decomposition," Working Papers 105, Peruvian Economic Association.

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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