Household Schooling Behaviors and Decentralization

Educational policies and household behaviors interact to determine educational outcomes. Much educational literature, including that on decentralization, focuses almost exclusively on school resources and ignores substantial household resources devoted to schooling. The failure to consider how households change resource allocations may lead to important misunderstandings of decentralization effects. A simple framework is presented for (i) how households determine schooling investments through choice and voice and (ii) what are implications of decentralization on household behaviors given information problems. Some aspects of decentralization may increase efficiency; others are neutral or reduce efficiency. For both efficiency and distributional reasons, there may be tradeoffs regarding impacts of decentralization. These considerations mean that there are no simple summary conclusions. Instead good analysis must be sensitive to particular aspects of decentralization being evaluated and implications for efficiency and distribution within particular contexts. Systematic empirical studies of household responses to decentralization are high priority for educational research.