The Aggregate Effect of School Choice: Evidence from a Two-stage Experiment in India
We present experimental evidence on the impact of a school choice program in the Indian state of Andhra Pradesh (AP) that featured a unique two-stage lottery-based allocation of school vouchers that created both a student-level and a market-level experiment. This design allows us to study both the individual and the aggregate effects of school choice (including spillovers). We find that private-school teachers have lower levels of formal education and training than public-school teachers, and are paid much lower salaries. On the other hand, private schools have a longer school day, a longer school year, smaller class sizes, lower teacher absence, higher teaching activity, and better school hygiene. After two and four years of the program, we find no difference between the test scores of lottery winners and losers on math and Telugu (native language). However, private schools spend significantly less instructional time on these subjects, and use the extra time to teach more English, Science, Social Studies, and Hindi. Averaged across all subjects, lottery winners score 0.13σ higher, and students who attend private schools score 0.23σ higher. We find no evidence of spillovers on public-school students who do not apply for the voucher, or on students who start out in private schools to begin with, suggesting that the program had no adverse effects on these groups. Finally, the mean cost per student in the private schools in our sample is less than a third of the cost in public schools. Our results suggest that private schools in this setting deliver (slightly) better test score gains than their public counterparts, and do so at substantially lower costs per student. More generally, our results highlight that ignoring heterogeneity among schools' instructional programs and patterns of time use may lead to incorrect inference on the impact of school choice on learning outcomes.
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