What happens to parental expenditure on education when the government steps in to subsidize schooling? AdamSmithee has the answer.
This paper examines a dataset from Zambia which suggests "household educational expenditures and school cash grants are substitutes with a coeffcient of elasticity between -0.35 and -0.52." As a result, anticipated cash grants "have no impact on cognitive achievement, but unanticipated funds lead to significant improvements in learning."Not the most encouraging of conclusions for advocates of increased education expenditure as a solution to ... well, anything, really, other than the further depletion of already threadbare government coffers.The policy conclusion is clearly that crash grant allocation decisions should be random. The M&E problem? A randomized trial (the sort done on Mexico's Progressa program) of the impact of cash grants on schools would find a significant impact. But when the results were used as justification to give grants to all schools, the impact would disappear.
Comments