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 even 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.<sup>9</sup>

- 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.<sup>10</sup>

- 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 they exist, they are affordable. However, private schools do not exist everywhere; in particular they are constrained by the availability of teachers and potential demand side considerations reflecting the size of the village. Private schools are therefore _not_ accessible to all. Since available teachers in rural areas are typically (just) secondary-educated, privates schools are also by necessity limited to the primary schooling market. It is unlikely that private schools will cater to the

> 9 Private schools are secular schools, the majority of whom do not receive any funding from either the government or private agencies. A recent study by the authors (Andrabi and others 2005a) shows that religious schools play a much smaller role in Pakistan than believed. The share of religious schooling is less than one percent, lower than enrollment in religious institutions in the US. Most private schools in Pakistan do not receive any external funding, which makes them equivalent to the private _unaided_ schools in India, for instance. This is in sharp contrast to (say) Indonesia, where private schools receive significant subsidies from the government (James, King and Suryadi 1996).

> 10 National Council on Educational Statistics (1995) Table 1.5.

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