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Finance and Expenditures in Education - Publications


Soft Skills or Hard Cash? The Impact of Training and Wage Subsidy Programs on Female Youth Employment in Jordan 
Matthew Groh, Nandini Krishnan, David McKenzie, Tara Vishwanath. 2012

Education Finance: It's How, Not Simply How Much, That Counts 
Emiliana Vegas, Chelsea Coffin. 2012

SABER - Finance: Essential Elements 
Working Paper. 2012

SABER - School Finance Objectives and Conceptual Approach 
Working Paper. 2011

School Inputs, Household Substitution, and Test Scores 
Jishnu Das, Stefan Dercon, James Habyarimana, Pramila Krishnan, Karthik Muralidharan, Venkatesh Sundararaman . 2011

Financing Lifelong Learning (pdf - 170KB)
Hessel Oosterbeek, Harry Anthony Patrinos. 2008
This paper describes and analyzes different financial schemes to promote lifelong learning. Considered are financial instruments to stimulate successful early learning, financial aid schemes and subsidization mechanisms. Theoretical analyses about funding of early learning have mainly focused on vouchers. Yet, the available empirical evidence is more ambiguous about the effects of vouchers than about the effects of conditional cash transfers and financial incentives for pupils and teachers.

Trends in International Trade in Higher Education: Implications and Options for Developing Countries
Sajitha Bashir. 2007
The objectives of this paper are to provide policy makers in developing countries, Bank staff and others associated with higher education policy development with information on and analyses of the recent trends in international trade in higher education and to present the policy issues and options that arise from it.

Demand-Side Financing in Education 
Harry Anthony Patrinos. 2007

Mozambique - Poverty and Social Impact Analysis - Primary school enrollment and retention - the impact of school fees. 2005
The main objective of this poverty and social impact analysis (PSIA) is to measure the impact of direct costs (formal and informal school fees, and related schooling expenses), and opportunity costs on enrollment and pupil retention in primary education. The analysis also provides insights into the contextual factors associated with low pupil retention, and an examination of the likely impact, and magnitude of policy alternatives aimed at lowering all costs, and mitigating contextual factors.

The Economic and Human Development Costs of Missing the Millennium Development Goal on Gender Equity (pdf, 550KB)
Dina Abu-Ghaida, Stephan Klasen. 2004
This paper is concerned with the instrumental impact of countries failing to meet the Millennium Development Goal (MDG) on gender equity. The prospect of countries failing to meet the MDG is not just a theoretical possibility but a likely outcome for some 45 countries for which data exist. The purpose of the paper is therefore to estimate to what extent these countries will suffer losses in terms of economic growth, as well as foregone reductions in fertility, child mortality, and undernutrition. The main contribution of the paper is to link the data about current trends in gender inequality in education with the results of studies that have estimated the impact of gender inequality on these various development outcomes. The paper demonstrates that countries that fail to meet the MDG on gender inequality will have to face considerable costs in terms of foregone economic growth, as well as reductions in fertility, child mortality, and undernutrition. These costs will already be apparent by 2005, but will mount thereafter.

Public Expenditure Tracking Surveys in Education Peru, Uganda and Zambia
Ritva Reinikka & Nathanael Smith. 2004
Public expenditure tracking surveys, or PETS, now implemented in a number of countries including Cambodia, Ghana, Peru, Tanzania, Uganda and Zambia have proven to be key instruments in determining how much of education resources originally allocated actually reach the schools.

Public and Private Funding of Basic Education in Zambia: Implications of Budgetary Allocations for Service Delivery. Africa Region Human Development Working Paper No. 62
Jishnu Das, Stefan Dercon, James Habyarimana, and Pramila Krishnan. 2004
This report presents findings from a survey of 182 primary (grades 1-7) and basic (grades 1-9) schools carried out in Zambia in 2002. It describes and analyzes resource flows to these schools from three sources: rule-based funding from the center, discretionary funding from district and provincial educational offices, and household spending on education.

When Can School Inputs Improve Test Scores? 
Jishnu Das, Stefan Dercon, James Habyarimana, Pramila Krishnan. 2004
The relationship between school inputs and educational outcomes is critical for educational policy. Das, Dercon, Habyarimana, and Krishnan recognize that households will respond optimally to changes in school inputs and study how such responses affect the link between school inputs and cognitive achievement. To incorporate the forward-looking behavior of households, the authors present a household optimization model relating household resources and cognitive achievement to school inputs. In this framework, if household and school inputs are technical substitutes in the production function for cognitive achievement, the impact of unanticipated inputs is larger than that of anticipated inputs. The authors test the predictions of the model for nonsalary cash grants to schools using a unique data set from Zambia. They find that household educational expenditures and school cash grants are substitutes with a coefficient of elasticity between –0.35 and –0.52. Consistent with the optimization model, anticipated funds have no impact on cognitive achievement, but unanticipated funds lead to significant improvements in learning. This methodology has important implications for educational research and policy.

Does Globalization Increase Child Labor? Evidence from Vietnam (pdf, 726KB)
Eric Edmonds, Nina Pavcnik. 2001
This paper considers the impact of liberalized trade policy on child labor in a developing country. From 1993 to 1997, the government of Vietnam gradually relaxed its rice export quota. During this period the average domestic price of rice increased 29% relative to the consumer price index. We exploit regional and intertemporal variation in the real price of rice to examine the relationship between these price fluctuations and the economic activities of children using a panel of Vietnamese households that spans the period of quota change. Although one quarter of all children work in agriculture, we find that reductions in child labor are increasing with rice prices. Declines in child labor are largest for girls of secondary school age, and we find a corresponding increase in school attendance for this group. Overall, rice price increases can account for almost half of the decline in child labor that occurs in Vietnam in the 1990s. Greater market integration, at least in this case, appears to be associated with less child labor. Our results suggest that the use of trade sanctions to eradicate child labor is unlikely to yield the desired outcome.

Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment (pdf, 246KB)
Joshua Angrist, Eric Bettinger, Erik Bloom, Elizabeth King, Michael Kremer. 2001
Colombia's PACES program provided over 125,000 pupils from poor neighborhoods with vouchers that covered approximately half the cost of private secondary school. Since many vouchers were allocated by lottery, we use differences in outcomes between lottery winners and losers to assess program effects. Three years into the program, lottery winners were 15 percentage points more likely to have attended private school, had completed .1 more years of schooling, and were about 10 percentage points more likely to have finished 8 th grade, primarily because they were less likely to repeat grades. The program did not significantly affect dropout rates. Lottery winners scored .2 standard deviations higher on standardized tests. There is some evidence that winners worked less than losers and were less likely to marry or cohabit as teenagers. On average, lottery winners increased their educational expenditure by about 70% of the value of the voucher. Since winners also worked less, they devoted more total resources to education. Compared to an equivalent expansion of the public education system, the voucher program increased annual government educational expenditure by about $24 per winner. But the costs to the government and to participants were probably much less than the increase in winners' earnings due to greater educational attainment.

Reform of Ethiopian Higher Education Financing: Conceptual and Policy Issues (pdf, 131KB)
Bruce Chapman. 2000
This paper examines two issues related to higher education financing. The first is conceptual and involves an explanation of the economic and social case for: (i) having higher education charges; and (ii), for such charges to be collected according to a former student's income. The issues addressed are matters of principle and thus apply to all countries. Second, possible reforms of current Ethiopian higher education financing arrangements are considered in the context of the conceptual framework. This discussion represents the author's view of how Ethiopian policy in this area can be improved in a way that achieves more propitious outcomes in both economic and social terms.

Decentralization of Education: Demand-Side Financing (pdf, 3MB)
Harry Anthony Patrinos and David Lakshmanan Ariasingam. 1997
The book reviews and analyses World Bank education projects that became effective from 1993 to 1996. The analysis is limited to projects with demand-side financing components and is based on World Bank Staff Appraisal Reports. Demand-side financing refers here to the channeling of public funds directly to individuals, institutions, and communities on the basis of expressed demand. It may also mean resource mobilization by beneficiaries for identified needs.

Child Labor: Issues, Causes and Interventions (pdf, 49KB)
Faraaz Siddiqi, Harry Anthony Patrinos
Child labor is a pervasive problem throughout the world, especially in developing countries. Africa and Asia together account for over 90 percent of total child employment. Child labor is especially prevalent in rural areas where the capacity to enforce minimum age requirements for schooling and work is lacking. Children work for a variety of reasons, the most important being poverty and the induced pressure upon them to escape from this plight. Though children are not well paid, they still serve as major contributors to family income in developing countries. Schooling problems also
contribute to child labor, whether it be the inaccessibility of schools or the lack of quality education which spurs parents to enter their children in more profitable pursuits. Traditional factors such as rigid cultural and social roles in certain countries further limit educational attainment and increase child labor.

Education With and Without the State (pdf, 156KB)
Edwin G. West
Since today's prosperous nations were once "developing" countries, it is useful to compare their historical circumstance with those of current developing countries. The characteristics of education in 19th century Britain (then a developing country) turn out to be remarkably similar to those now reported for countries such as Belize, Mauritius and Chile. First, the growth of education is associated with increases in per capita income; second, parents voluntarily spend more (directly from their own pockets) on education as their incomes rise; third, the growth of education combats the Malthusian specter of overpopulation. These findings appear to be independent of education being with or without the state.

The Costs of Discrimination in Latin America (pdf, 162KB)
Harry Anthony Patrinos
Indigenous, ethnic, racial and linguistic minorities worldwide are in an inferior economic and social position vis-à-vis the "mainstream" population. The ethnic concentration of poverty and inequality is increasingly being recognized in the development literature. In this paper, studies from six Latin American countries that estimate the costs to an individual of being an economic minority are reviewed. The studies decompose the overall earnings gap into two components: one is the portion attributable to differences in the endowments of income-generating characteristics ("explained" differences); the other portion is attributable to differences in the returns that majority and minority workers receive for the same endowment of income-generating characteristics ("unexplained"). This latter component is often taken as reflecting the "upper bound" of wage discrimination. In economic terms, discrimination refers to differences in economic outcomes between groups that cannot be accounted for by the skills and productive characteristics of these groups. The "upper bound" of discrimination gives an indication of the "cost" of being a minority.

Case Studies


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