Summary: We study the impact of providing school report cards with test scores on subsequent test scores, prices, and enrollment in markets with multiple public and private providers. A randomly selected half of our sample villages (markets) received report cards. This increased test scores by 0.11 standard deviations, decreased private school fees by 17 percent, and increased primary enrollment by 4.5 percent. Heterogeneity in the treatment impact by initial school test scores is consistent with canonical models of asymmetric information. Information provision facilitates better comparisons across providers, and improves market efficiency and child welfare through higher test scores, higher enrollment, and lower fees.

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

Citation: Andrabi, Tahir, Jishnu Das, and Asim I. Khwaja. 2017. "Report Cards: The Impact of Providing School and Child Test Scores on Education Markets." American Economic Review, 107 (6): 1535-63.

Tahir Andrabi

Jishnu Das

Asim Khwaja

In Pakistan, the number of private schools increased over tenfold from 1983 to 2005, and now account for 40% of all primary school enrollment throughout the country. However, despite the broadened network of schools, parents typically lack adequate information to compare schools, and schools take advantage of this. Higher quality schools mark up their tuition fees more than what they are worth, and lower quality schools are able to hide their underperformance.

This study uses a randomized control trial (RCT) to test one possible solution to this information mismatch: give parents report cards that not only reflect their child’s performance, but also rank the performance of their child’s school relative to all the other schools in their village. To conduct this study, we randomly selected 112 villages throughout three districts in Punjab, Pakistan’s largest province. Each village contained on average 4.4 public schools and 2.9 private schools, and all children were tested on basic English, mathematics, and Urdu skills. We then provided parents in half of these villages with report cards displaying both their child’s test scores and their child’s school rank within the village. In control villages, parents did not receive any information.

Study Design and Findings

Report cards improved school quality

Our study found that test scores in report-card villages increased 42% (0.11 standard deviations) compared to control villages. It appears that these report cards gave parents access to information previously unavailable to them about how their children’s schools compared to others in their village. Armed with this knowledge, parents were able to make more informed decisions about where they wanted to send their children to school. We believe that the threat of parents withdrawing their children and enrolling them in other schools spurred competition and forced schools to improve. Schools that had scored low on the original assessments were the primarily drivers of these test score improvements, which is consistent with the idea that they were the greatest recipients of parental pressure and complaints. In addition, many of the lowest-performing private schools shut down entirely.

Schools also became more affordable

Schools also became more affordable. High-quality schools in report-card villages lowered their annual tuition fees by 17%. While it may seem counter-intuitive that lowering fees is a positive reaction by schools, remember that these high-quality schools were initially marking up their prices higher than they were worth. Because the report cards gave parents a more accurate picture of how good each school was, the higher-scoring schools became more accountable to parents and reduced their fees. In cheaper schools, overall enrollment among primary-age children consequently rose by 3 percentage points. It is important to note that this increase was not caused by students shifting between schools, but by roughly 40 previously out-of-school children per village enrolling into school for the first time, possibly because they had never before been able to afford it.

Report cards impacted public schools too

Surprisingly, report cards had an effect on public schools as well. Though public schools are free of cost and should not, therefore, respond to market pressure, we found that test scores as well as investment in teacher qualifications rose in report-card village public schools. Parents, now empowered with credible information about their child’s school, put more pressure on schoolteachers in both public and private schools to improve their quality. As a result, public schools heightened their qualification standards for teaches and private schools, which could not afford to pay for higher quality teachers, instead increased their time spent on coursework. Child learning therefore improved in all schools.

Study Resources

The following resources are for public use in presentations, papers, lectures, and more under the Creative Commons license BY-ND. Click the images below to view or download individual images, or use the button to download all.

As a condition of use, please cite as: Andrabi, Tahir, Jishnu Das, and Asim I. Khwaja. 2017. "Report Cards: The Impact of Providing School and Child Test Scores on Education Markets." American Economic Review, 107 (6): 1535-63.

Download All