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School inputs, household substitution, and test scores

Author

Listed:
  • Das, Jishnu
  • Dercon, Stefan
  • Habyarimana, James
  • Krishnan, Pramila
  • Muralidharan, Karthik
  • Sundararaman, Venkatesh

Abstract

Empirical studies of the relationship between school inputs and test scores typically do not account for the fact that households will respond to changes in school inputs. This paper presents a dynamic household optimization model relating test scores to school and household inputs, and tests its predictions in two very different low-income country settings -- Zambia and India. The authors measure household spending changes and student test score gains in response to unanticipated as well as anticipated changes in school funding. Consistent with the optimization model, they find in both settings that households offset anticipated grants more than unanticipated grants. They also find that unanticipated school grants lead to significant improvements in student test scores but anticipated grants have no impact on test scores. The results suggest that naïve estimates of public education spending on learning outcomes that do not account for optimal household responses are likely to be considerably biased if used to estimate parameters of an education production function.

Suggested Citation

  • Das, Jishnu & Dercon, Stefan & Habyarimana, James & Krishnan, Pramila & Muralidharan, Karthik & Sundararaman, Venkatesh, 2011. "School inputs, household substitution, and test scores," Policy Research Working Paper Series 5629, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5629
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    References listed on IDEAS

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    More about this item

    Keywords

    Tertiary Education; Education For All; Access to Finance; Teaching and Learning; Disability;
    All these keywords.

    JEL classification:

    • 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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