Assessing the market forces behind effective education: Evidence from Pakistan


Published 25.11.20
Photo credit:
©STARS/Kristian Buus

In low-income countries, students’ economic background can determine how well their learning needs are matched with their schools’ instructional level

Read “Estimating an equilibrium model of horizontal competition in education” by Natalie Bau here.

How much does student learning depend on the match between their instructional needs and level of instruction offered by their schools? To what extent does the quality of such matches depend on the economic background of students or on incentives of private schools? 

In this video, Natalie Bau discusses these questions in the context of her findings from private schools in Pakistan. Her research highlights that instructional match between students and schools is extremely important: a good match can improve students’ learning by as much as an entire year. However, the ability to seek a good match while making enrolment decisions appears to depend on the economic background of students: poor students often lack the information to make good matches, to the detriment of their educational attainment. This learning and welfare loss is exacerbated by the fact that private schools tend to be more attentive to the instructional needs of wealthier students. Understanding the role economic and market forces play in educational attainment can thus have important implications for policy design in low-income countries.