Does Abolishing Fees Reduce School Quality? Evidence from Kenya

In 2003 Kenya abolished user fees in all government primary schools. We find that this Free Primary Education (FPE) policy resulted in a decline in public school quality and increased demand for private schooling. However, the former did not reflect a decline in value added by public schools as anticipated if fees contribute to local accountability but rather the selection of weaker pupils into free education. In contrast, affluent children who exited to the private sector in response to FPE benefited from a strong, causal effect on their exam ∗We acknowledge the enormous assistance of Charles Obiero and Samuel Nthenge of the Ministry of Education and Godfrey Ndeng’e and Samuel Kipruto of the Kenyan National Bureau of Statistics in assembling the data sources used here. This document is an output of research funding from the UK Department for International Development (DFID) as part of the iiG, a research programme to study how to improve institutions for propoor growth in Africa and South-Asia. We have benefited from participants’ feedback at iiG events in Nairobi (Institute for Economic Affairs), Kampala (Economic and Policy Research Council) and Oxford (Centre for the Study of African Economies). The views expressed here are not necessarily those of DFID. †Bold: Institute for International Economic Studies, Stockholm University, [email protected]. Kimenyi: Brookings Institution, Washington D.C., [email protected]. Mwabu: Department of Economics, University of Nairobi, [email protected]. Sandefur: Center for Global Development, Washington D.C., [email protected]. 1 CSAE Working Paper WPS/2011-04 performance which is robust to selection on unobserved ability. JEL Codes: H52, I22, O15