THE ACHIEVEMENT GAP BETWEEN GOVERNMENT AND PRIVATE SCHOOLS IN PAKISTAN A Thesis submitted to the Faculty of the Graduate School of Arts and Sciences of GeorGetown University in partial fulfillment of the requirements for the deGree of Master of Public Policy in Public Policy By Maryam Akmal, B.A. WashinGton, DC April 12, 2016 CopyriGht 2016 by Maryam Akmal All RiGhts Reserved ii THE ACHIEVEMENT GAP BETWEEN GOVERNMENT AND PRIVATE SCHOOLS IN PAKISTAN Maryam Akmal, B.A. Thesis Advisor: Adam Thomas, Ph.D. ABSTRACT LearninG outcomes in Pakistan have traditionally been poor. However, over the last two decades, the educational market place has chanGed substantially. In particular, enrollment in private schools has increased dramatically across a broad ranGe of income Groups in both urban and rural areas. Given the important role of private schools in Pakistan's educational landscape, there is an increasinG focus on the learninG Gap between Government and private schools. Using household-level data from rural and urban areas of Pakistan, this study estimates the extent to which private school students perform better than Government school students. iii I am Grateful to Professor Adam Thomas for his Guidance, support and encouragement throuGhout this project. Many thanks, Maryam Akmal iv TABLE OF CONTENTS Introduction .................................................................................................................................. 1 BackGround ................................................................................................................................... 3 Literature Review .......................................................................................................................... 4 Conceptual Framework and Hypothesis ....................................................................................... 8 Data and Methods ...................................................................................................................... 11 Descriptive Statistics ................................................................................................................... 15 Results ......................................................................................................................................... 20 Discussion ................................................................................................................................... 30 References .................................................................................................................................. 34 Appendix ..................................................................................................................................... 38 v LIST OF TABLES Table 1: Definitions of Variables ................................................................................................. 14 Table 2: Descriptive Statistics for Dependent, Key Independent and Control Variables ............ 17 Table 3: Key Characteristics DisagGreGated by School Type ....................................................... 19 Table 4: ReGression Results for Math Test Scores ...................................................................... 21 Table 5: ReGression Results for EnGlish ReadinG Scores .............................................................. 24 Table 6: ReGression Results for Local ReadinG Scores ................................................................. 27 vi INTRODUCTION Pakistan has the second hiGhest number of out-of-school children in the world (UNESCO, 2015).1 Even amonG children who are enrolled in school, learninG levels are low. Estimates suGGest that only 43 percent of Grade-five students can perform Grade-two level division, while only 50 percent of students in Grade five can read Grade-two level sentences in Pakistan's national lanGuage, Urdu (ASER Pakistan, 2013). Based on the current state of education, even if all Pakistani children were enrolled in school, many of the students would still be functionally illiterate and innumerate (Das et al., 2006). In order to institute effective policy reform in Pakistan's education sector, it is important to identify key factors contributinG to the poor learninG inside the classrooms. The case for focusing on student learninG may be strenGthened even further by the possible link between quality of education and enrollment; improved learninG in schools may boost enrollment and retention, as parents and children Gain a hiGher return on their investment of time and resources. Education is a key driver of individual earninGs and national economic Growth (Hanushek and Wößmann, 2007). AccordinG to the Pakistan Bureau of Statistics (PBS), more than one-third of Pakistan's population is below the age of ten. Many policymakers believe that sustained national Growth will require that this siGnificant seGment of the population receives a hiGh- quality education. The Government of Pakistan has demonstrated its commitment to improvinG education access and quality by makinG education a key priority of Pakistan's National Plan of Action (2013). Pakistan’s education budGet, which has averaged at around 2 percent of GDP in 1 According to UNESCO’s most recent estimates, 6.7 million Pakistani children are out of school, of which more than half are female. 1 recent years, is primarily used for teacher salaries. AccordinG to the World Bank (2008), 90 percent of Pakistan's education budGet is spent on the salaries of approximately 1.5 million teachers. However, notwithstandinG this investment in improvinG the quality of classroom instruction, student learninG outcomes continue to be disappointinG. Numerous studies have explored the impact of various educational inputs, such as teachers, facilities and curricula, on student learninG. Hanushek (2003) criticizes the emphasis on "input-based" rather than "incentive-based" education policies, arGuinG that increasinG resources does not siGnificantly improve student learninG. In Pakistan, Government and private schools have different incentive structures. For example, teachers in Government schools tend to be paid better and have more traininG and experience than private school teachers. However, salaries of teachers in Government schools are usually tied to education and seniority rather than to student learninG outcomes (Andrabi et al., 2010). KeepinG in mind the different incentive structures, this study analyzes education outcomes in Government and private schools across Pakistan using survey data from the Annual Status of Education Report (ASER) 2014. The survey covers 144 districts of Pakistan and provides information about student learninG, family characteristics and household information.2 The remainder of this paper is orGanized as follows. In the next section, I provide backGround on the evolution of private schoolinG in Pakistan. I then review the relevant literature and describe my conceptual framework, data, econometric methods and descriptive statistics. Lastly, I discuss my findinGs and results. 2 ASER selects districts based on the presence of local collaborating partners (ASER, 2010). While at present only 144 districts are surveyed, the ultimate goal of ASER is to cover all 157 districts of Pakistan. 2 BACKGROUND Approximately one-third of all students in Pakistan attend private schools (NGuyen and Raju, 2014). These schools serve a ranGe of income Groups and are prevalent in both rural and urban areas (Andrabi et al., 2002). While there are elite private schools caterinG to hiGh-income Groups in Pakistan, this paper focuses on the majority of private schools that are low-cost enterprises servinG low- and middle-income communities. These businesses are larGely unreGulated and receive almost no Government support (Andrabi et al., 2010). They tend to have low operational costs and are often run out of the owners' homes (Andrabi et al., 2010). Private schools also employ more untrained staff than Government schools, where teachers are paid siGnificantly more (Andrabi et al. 2010; French and KinGdon 2010). According to Andrabi et al. (2006), in many developinG countries, the per-child costs in private schools are siGnificantly lower than the per-child costs in Government schools due to the pay scales for Government teacher salaries. Private schools tend to employ teachers with lower academic qualifications and traininG. As a result, based on qualifications alone, teacher quality seems lower in the private sector. However, teacher effectiveness is a function of both qualifications and motivation, the latter of which is hard to measure. It is possible that the different incentive structures in Government and private schools may influence teachers' effort and motivation, and as a result, the quality of learninG (French and KinGdon, 2010). Despite their lower costs and inferior hirinG practices, private schools are larGely perceived as providinG better quality education than their Government counterparts, as evidenced by the risinG demand for private education in Pakistan. 3 The number of private schools in Pakistan more than doubled from 30,000 in the 1990s to 70,000 in 2008 (NGuyen and Raju, 2014).3 In the last two decades, enrollment in private schools has increased across a broad ranGe of income Groups, includinG hiGh-income, urban households and low-income, rural ones (Ibid.). UsinG LEAPS (LearninG and Educational Achievements in Punjab Schools) data collected between 2004 and 2007 in three districts of Punjab, Andrabi et al. (2010) conclude that average student achievement