We evaluate a program that recruited local entrepreneurs to open and operate new schools in 200 underserved villages in Sindh, Pakistan. School operators received a per-student subsidy to provide tuition-free primary education, and in half the villages received a higher subsidy for females. The program increased enrollment by 32 percentage points, and test scores by 0.63 standard deviations, with no difference across the two subsidy schemes. Estimating a structural model of the demand and supply for school inputs, we find that program schools selected inputs similar to those of a social planner who internalizes all the education benefits to society.

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