The Equilibrium Impacts of Unconditional Grants to Private Schools
Last registered on May 31, 2018

Pre-Trial

Trial Information
General Information
Title
The Equilibrium Impacts of Unconditional Grants to Private Schools
RCT ID
AEARCTR-0003019
Initial registration date
May 26, 2018
Last updated
May 31, 2018 9:33 AM EDT
Location(s)
Region
Primary Investigator
Affiliation
Other Primary Investigator(s)
PI Affiliation
Sabanchi University
PI Affiliation
Pomona College
PI Affiliation
World Bank
PI Affiliation
Harvard University
Additional Trial Information
Status
Completed
Start date
2012-05-01
End date
2014-12-31
Secondary IDs
Abstract
As market-based provision gains importance in education, addressing market failures can have substantial impact. This paper alleviates one such failure - access to finance - by experimentally allocating capital to 855 private schools across 266 villages in rural Pakistan. We provide either a `Low saturation' (L) treatment where only one private school in the village was randomly chosen to receive an unconditional grant of $500, or a `High saturation' (H) treatment, where all private schools received $500 each. Treated schools in the L arm saw substantial increases in revenues due to higher enrollment and investments in physical infrastructure, but show no increase in test scores or fees. In contrast, in the H arm, revenues increased due to both greater enrollment and increased fees. The higher fees accompanied test score increases as schools invested in additional infrastructure and teachers. The differential impact naturally follows from an understanding of the underlying market structure in an oligopolistic setting with capacity constraints and vertical differentiation. In the H arm, capacity expansion is less attractive as competition over a limited student pool may trigger a price-war. Therefore schools are more likely instead to invest in quality. While financial returns exceeded market interest rates in both cases, private returns are higher in the L arm whereas social returns are arguably higher in the H arm. This underscores the importance and appropriate design of public subsidies to the educational sector.
External Link(s)
Registration Citation
Citation
Andrabi, Tahir et al. 2018. "The Equilibrium Impacts of Unconditional Grants to Private Schools." AEA RCT Registry. May 31. https://doi.org/10.1257/rct.3019-2.0.
Former Citation
Andrabi, Tahir et al. 2018. "The Equilibrium Impacts of Unconditional Grants to Private Schools." AEA RCT Registry. May 31. http://www.socialscienceregistry.org/trials/3019/history/30190.
Experimental Details
Interventions
Intervention(s)
Our intervention sample comprises of private schools in 266 villages in Punjab, Pakistan. We offer unconditional cash grants of Rs 50,000 (approximately $500 in 2012) to every school randomly selected for treatment. We deliberately choose not to impose any conditions on the use of the grant apart from submission of a (non-binding) business plan. Schools are given two weeks to fill out the plan and must specify a disbursement schedule with a minimum of two installments. Funds are disbursed through the opening of a one-time use bank account for cash deposits.
Intervention Start Date
2012-09-03
Intervention End Date
2012-12-31
Primary Outcomes
Primary Outcomes (end points)
Enrollment, Fees, Test scores, Costs, School Inputs
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
We use a two-stage stratified randomization design where we first assign each village to one of three experimental groups and then schools within these villages to treatment. The three experimental groups are as follows: (1) Pure control - no school is offered a grant; (2) High-saturation: all schools are offered grants; and (3) Low-saturation: only 1 school in the village, regardless of the total number of private schools in the village, is offered a grant.
Experimental Design Details
Randomization Method
Computerized ballot conducted publicly
Randomization Unit
Two-stage randomization: (1) Villages; and (2) Schools
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
266 villages
Sample size: planned number of observations
880 schools
Sample size (or number of clusters) by treatment arms
77 control villages, 75 high-saturation villages, and 114 low-saturation villages
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers