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. (JEL D83, H75, I21, I28, O15, O18)

Value-added estimates-estimates based on the evolution rather than level of achievement-are viewed by most researchers as more reliable than cross-sectional comparisons since they ostensibly "difference out" the influence of omitted fixed inputs, such as wealth and ability. We show that the restricted value-added model, which assumes that past achievement carries over with no loss, is clearly rejected by the data, and that the more flexible lagged value-added model is biased by measurement error and omitted heterogeneity that enters each period. Using dynamic panel methods that address these biases and data on public and private schools in Pakistan, we find that the restricted value-added model yields wildly biased estimates for the private school effect, sometimes even flipping the sign. The lagged valueadded model performs better due to countervailing measurement error and heterogeneity biases. More generally, rapid and potentially heterogenous achievement decay or "fade-out", which evidence suggests underlies our results, has broad implications for experimental and non-experimental program evaluation, and value-added accountability systems.

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.

With an estimated one hundred and fifteen million children not attending primary school in the developing world, increasing access to education is critical. Resource constraints limit the extent to which demand based subsidies can do so. This paper focuses on a supply-side factor -the availability of low cost teachers -and the resulting ability of the market to offer affordable education. We use data from Pakistan together with official public school construction guidelines to present an Instrumental Variables estimate of the effect of government school construction on private school formation. We find that private schools are three times more likely to emerge in villages with government girls' secondary schools. In contrast, there is little or no relationship between the presence of a private school and pre-existing girls' primary, or boys' primary and secondary schools. Moreover, there are twice as many educated women and private school teachers' wages are 18 percent lower in villages that received a government girls' secondary school. In an environment with poor female education and low mobility, government girls' secondary schools substantially increase the local supply of skilled women. This lowers wages for women in the local labor market and allows the market to offer affordable education. These findings highlight the prominent role of women as teachers in facilitating educational access and resonates with similar historical evidence from developed economies -the students of today are the teachers of tomorrow.

This paper illustrates the central role of persistence in estimating and interpreting value-added models of learning. Using data from Pakistani public and private schools, we apply dynamic panel methods that address three key empirical challenges: imperfect persistence, unobserved heterogeneity, and measurement error. Our estimates suggest that only one-fifth to one-half of learning persists between grades and that private schools increase average achievement by 0.25 standard deviations each year. In contrast, value-added models that assume perfect persistence yield severely downward estimates of the private school effect. Models that ignore unobserved heterogeneity or measurement error produce biased estimates of persistence. (JEL I21, J13, O15)