A dime a day : the possibilities and limits of private schooling in Pakistan

This paper looks at the private schooling sector in Pakistan, a country that is seriously behind schedule in achieving the Millennium Development Goals. Using new data, we document the phenomenal rise of the private sector in Pakistan and show that an increasing segment of children enrolled in private schools are from rural areas and from middle-class and poorer families. The key element in their rise is their low fees-the average fee of a rural private school in Pakistan is less than a dime a day (Rs.6)! They hire predominantly local, female and moderately educated teachers who have limited alternative opportunities outside the village. Hiring these teachers at low cost allows the savings to be passed on to parents through very low fees. This mechanism—the need to hire teachers with a certain demographic profile so that salary costs are minimized—defines the possibility of private schools—where they arise, fees are low. It also defines their limits. Private schools are horizontally constrained in that they arise in villages where there is a pool of secondaryeducated women. They are also vertically constrained in that they are unlikely to cater to the secondary levels in rural areas, at least until there is an increase in the supply of potential teachers with the required skills and educational levels. 1 Corresponding author: Tahir Andrabi (tandrabi@pomona.edu). We thank Mehnaz Akber for early discussions and Safi Qureshey Foundation for initial financial support. We thank Tara Vishwanath, Michelle Riboud, Harold Alderman and others for useful comments. This research was funded by grants from the Poverty and Social Impact Analysis and Knowledge for Change Program Trust Funds and the South Asia region of the World Bank. The findings, interpretations, and conclusions expressed in this paper are those of the authors and do not necessarily represent the views of the World Bank, its Executive Directors, or the governments they represent. Working papers describe research in progress by the authors and are published to elicit comments and to further debate. 2 Introduction The 2000 Millennium Development Goals (MDGs) created a powerful global consensus to improve the development of poor countries by 2015. Central to this promise are the MDGs related to educational outcomes: (1) Ensure that all children complete primary education by 2015. (2) Eliminate gender disparities in primary and secondary education by 2005. By 2006, most countries have already fallen well behind the necessary targets to meet these goals. These worrying trends led to renewed calls for greater public investment in schools through school construction, teacher training programs and cash transfers for children. Notably absent in the proposals has been any role for private schools. 2 One reason why private schools have never been seen or used as an instrument for mass education is that they typically serve the elite. In the US, 4 percent of low-income families send their children to private schools compared to 19 percent among the rich. Of parents with less than high school education, only 3 percent send their children to private schools compared to 19 percent for parents with graduate or professional degrees. Moreover, the share of private schooling is higher in tertiary and secondary education compared to primary education, by which time a large share of children from poor families have dropped out. These patterns are not unique to the US. The share of private schooling is higher in secondary compared to primary education a majority of countries worldwide; in others the difference is fairly low and usually associated with the high state funding of private schools (Belgium, Spain, Netherlands and Chile are four such examples). In contrast, South Asian countries such as Pakistan, Bangladesh and India all show high shares of private enrollment at the primary level. Countries such as Zimbabwe in Sub-Saharan Africa as well as Lebanon and the gulf-states in the Middle East also stand out, with both high private school enrollment and a larger private sector share at the primary level. We focus our attention on Pakistan, a country that is severely off-track in achieving the MDG goals and where the role of private schools is strongly debated in academic, popular and policy writings. A substantial part of this debate is framed in terms of the “rising fees” and limited access to these schools in rural areas, concerns strongly voiced in the government’s recent policy statement on private schools: 2 The United Nations (2005) 3 NCES (1995), Table 1.5 4 Based on the World Bank’s Edstats database, available at http://www1.worldbank.org/education/edstats/ 5 See Rahman (2005) and Abbas (2006) 3 “It is argued that because of immense resource requirement, it is difficult for the government to achieve the objective of universalization of primary education. Accordingly, the opening of primary schools in the private sector is considered additionally to the effort of the government towards universalization. This is not a legitimate argument. The participation rates being already higher in urban settlements, it is in the rural areas that more schools are needed. The type of clientele going to these schools would any way participate in education. Thus, their role in universalization remains only marginal. Furthermore, because of the use of English as a medium of instruction, and high fee structure, these institutions are best suited to serve the requirement of elite population. Such a development is contradicted if effort is to be directed towards the development of an egalitarian society.” A specific picture of the private sector is painted whereby (a) private schools charge high fees; (b) private schools locate typically in urban areas and (c) private schools cater to an “elite population”. Neither this debate nor this characterization is unique to Pakistan. 7 Using newly available data we present a starkly different picture of private schooling in Pakistan. There was a phenomenal rise in the share of the private sector in educational provision during the 1990s and an increasing segment of children enrolled in private schools are from rural areas and from middle-class and poorer families. We submit that private schools are better able to adapt to local conditions and use local labor markets in a cost-effective manner, allowing the savings to be passed on to parents through very low fees. The median fee of a rural private school in Pakistan is less than a dime a day (Rs.6 per day, or Rs.120 per month). If replicable in other countries, the results suggest that separating the financing of education (the government) from the provision of education (through the private sector) will have large gains, without necessarily sacrificing equity. Two considerations drive our focus on Pakistan. First, the extent of private schooling in Pakistan is striking. In 2000, 35 percent of children enrolled in school at the primary level were in private schools, and this number falls by a third for middle and high schools to 25 percent. Private schooling in Pakistan at the primary level is large, widespread and increasing over time. Second, See Ministry of Education (2006) 7 See The Bangladesh Observer (2004). 8 In the broader South-Asian context, Kingdon (1996 and 1998) first looked at private schools in the Indian context, where the private sector accounts for 15 percent of all enrollments; more recent contributions include Bajpai, Dholakia and Sachs (2005). The proliferation and nature of private schools in India appears to be similar to that in Pakistan. For in stance, Tooley (2001, pg.13) observes: “Any visitor to the ‘slums’ of any of the big cities in India will be struck by the sheer number of private schools—there seems to be one on almost every street corner or down every alleyway. Some of these confusingly follow what they see as an English tradition and call themselves public schools but they are wholly private in every way and are certainly not elite institutions.” 4 Pakistan is the only low-income country, to our knowledge, that has a high quality census of all private schooling facilities in the country. These data allow us to understand the structure of private schools throughout the country; the large sample size permits useful comparisons even in regions where the extent of private schooling is smaller. Using this census of private schools in addition to representative household-surveys from 1991 and 2001 and data collected by the authors, we document several patterns about the private schooling phenomenon in the country. • The growth in private schooling is higher in rural compared to urban areas and is high among the poorest segments of the population. What is equally remarkable is that these schools are overwhelmingly for-profit enterprises—they have sprung up around the country without much state regulation or subsidy. 9 • Private schools charge (very) low fees. A typical private school in a rural village of Pakistan charges Rs.1000 ($18) per year, which represents 4 percent of the GDP per capita for the country. In the US, private schools (elementary and secondary) charged $3524 in 1991. At 14 percent of GDP per capita, the relative cost of private schooling is almost 3.5 times as high in the US compared to Pakistan. • The key to charging low fees is keeping costs down. Since teachers’ salaries constitute the bulk of educational budgets around the world, lowering wages significantly reduces the overall cost of providing education. Private schools employ young, single, moderately educated and untrained local women. Since alternative employment opportunities for these women are limited, they are paid considerably lower wages than their male counterparts. • These mechanisms define the possibility of private schools as well as their limits. Where private schools arise, the use of locally educated women and the structure of the labor market allow them to charge low fees. Where