Report Cards: The Impact of Providing School and Child Test-scores on Educational Markets

Abstract

Recent evidence on the impact of information provision on service delivery has been mixed, with overall outcomes even worsening in certain cases. We examine the market-wide impact of an intervention that provides school and child-level learning report cards in a randomly selected half of 112 educational markets (villages) in Pakistan. We track all 823 public and private primary schools, 12,000 Grade 3 children, 5,000 teachers and a sample of 1,800 households in these villages. Report card provision improves learning by 0.10 standard deviations and decreases private school fees by 21 percent, with very small changes in school switching and moderate increases in overall enrollment. We argue that providing report cards generates credible competitive pressures on schools to increase price-adjusted quality, with the specific tool used - decreasing prices or raising quality - determined by the nature of production costs and market demand. Consistent with this, we find substantial heterogeneity in the impact across schools. Initially "bad" (below median baseline test scores) private schools respond by increasing quality - showing learning gains of 0.34 standard deviations - or shutting down, but show limited fee changes. In contrast, initially "good" (above median) private schools show no learning gains, but drop fees substantially. Government schools see a tenth of a standard deviation increase in learning. Moreover, we find schools increase investments, while there is little evidence of greater (direct) parental investments. The results show the cost of providing information is similar to the school fee drop, and the intervention likely raised child welfare by increasing learning and lowering educational costs.