School Inputs, Household Substitution, and Test Scores

40 Pages Posted: 2 Mar 2011

See all articles by Jishnu Das

Jishnu Das

Georgetown University; Georgetown University

Stefan Dercon

University of Oxford - Department of Economics

James P. Habyarimana

Georgetown University; Institute for the Study of Labor (IZA)

Pramila Krishnan

University of Oxford - Department of Economics

Karthik Muralidharan

University of California, San Diego (UCSD)

Venkatesh Sundararaman

World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: February 2011

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. We present a dynamic household optimization model relating test scores to school and household inputs, and test its predictions in two very different low-income country settings - Zambia and India. We 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, we find in both settings that households offset anticipated grants more than unanticipated grants. We also find that unanticipated school grants lead to significant improvements in student test scores but anticipated grants have no impact on test scores. Our 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 and Dercon, Stefan and Habyarimana, James P. and Krishnan, Pramila and Muralidharan, Karthik and Sundararaman, Venkatesh, School Inputs, Household Substitution, and Test Scores (February 2011). NBER Working Paper No. w16830, Available at SSRN: https://ssrn.com/abstract=1774403

Jishnu Das (Contact Author)

Georgetown University ( email )

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Stefan Dercon

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James P. Habyarimana

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Pramila Krishnan

University of Oxford - Department of Economics ( email )

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Karthik Muralidharan

University of California, San Diego (UCSD) ( email )

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Venkatesh Sundararaman

World Bank ( email )

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