Education

There has been a remarkable improvement in access to basic education. Enrollment in primary education in developing regions reached 91 per cent in 2015, up from 83 per cent in 2000. However, many children attending school do not acquire basic numeracy and literacy skills. Unesco, in its 2013/2014 Education for All Global Monitoring report, called it a learning crisis.

The work of AIID focuses on interventions that aim to improve learning. Assessing the effect of the program on student learning, as measured through test scores, is a common theme throughout the studies. In addition, we analyze the behavior of teachers, students and parents, to understand better the causal pathways that are behind the observed effects. Our research includes studies about financial literacy and education governance and finance. We also conduct evaluation studies of early childhood development programmes.

Financial literacy

Financial literacy is defined as one’s ability to understand financial concepts, plan one’s finances, and understand financial services and products. These skills are needed when investing in a business, planning for an old pension or buying a house. Also the poor make complex financial decisions to ensure a steady cash flow and insure against risk. The evidence suggests that people often take financial decisions without understanding the costs and benefits of alternatives is mounting. Poor people, for instance, often pay high interest rates for loans while at the same time saving against rather low interest rates.

Three of our recent financial literacy research projects are highlighted below:

Through our work on financial diaries in Nigeria and Kenya we hope to increase our understanding on how the poor manage their finances, cope with risks, and how this correlates with financial literacy skills.

The project is ongoing. First results are expected fall 2015.

Research team:

AIID researchers: Wendy Janssens & Marijn van der List.

As part of a consortium led by Innovations for Poverty Action we evaluated a financial literacy program implemented in primary and junior secondary schools in Ghana. The program was supported by Aflatoun, an NGO that provides technical assistance for the introduction of youth financial literacy programs worldwide. In addition to the Aflatoun program, we evaluated a program that focused just on improving financial literacy and savings, but did not include a social component.

The project was completed in 2015.

Outcomes:

After nine months, both programs had significant impacts on savings behavior relative to the control group, mostly because children moved savings from home to school. We observed few other impacts. We do find that financial education, when not accompanied by social education, led children to work more compared to the control group, whereas no such effect is found for the integrated curriculum; however, the difference between the two treatment effects on child labor is not statistically significant.

Research team:

AIID researcher: Menno Pradhan
Collaborators: Jim Berry, Cornell University, United States & Dean Karlan, Yale University, United States.
Publication:

Work-in-progress:

Berry, J., D. Karlan, M.P. Pradhan (2015). “The Impact of Financial Education for Youth in Ghana”, Tinbergen Institute Discussion paper, TI 2015-043/V

AIID supported the Ministry of Finance of the Russian Federation to design the evaluation of the World Bank Financial Education and Financial Literacy Project.

The project was completed in 2014.

Research team:

AIID researchers: Menno Pradhan & Anne Duynhouwer.
Collaborators: Evgenia Motchenkova, VU University
Publication:

Reports are available upon request and with permission of Non-commercial Foundation for Enterprise Restructuring and Financial Institutions Development.
Presentation the evaluation design at workshop “Challenges and Perspectives of Youth Financial Literacy: International and Russian Experience”, 27th March 2014, Marriott Moscow Royal Aurora Hotel, Moscow, Russia. Presentation can be viewed on youtube.

Education Governance and Finance

Even though primary school enrollment increased enormously, children do not acquire sufficient the numeracy and literacy skills (see above). AIID is involved in the evaluation of various education policies aimed at improving education outcomes. Much of our research focusses on the education sector in Indonesia. Three recent research projects are highlighted below:

In collaboration with the Government of Indonesia and the World Bank Indonesia office, AIID participated in a study which estimated the impact of doubling teaching salaries in Indonesia. The raise in teacher salaries was part of a program where teachers, who met the criteria for certification, were certified and received a doubling of base pay. The study used an experimental design to estimate the impact of the program on existing teaching. It found that teachers who received the wage increase reduced their second jobs and had less financial stress, but learning outcomes did not change.

The project is ongoing.

Research team:

AIID researcher: Menno Pradhan.
Collaborators: Joppe de Ree, World Bank, Jakarta Indonesia; Halsey Rogers, Washington, United States, Karthik Muralidharan, UC San Diego, NBER, BREAD, J-PAL.
Publication:

Work-in-progress:

De Ree, J., K. Muralidharan, M.P. Pradhan, H. Rogers (2015). “Double or Nothing? Experimental Evidence on the Impact of an Unconditional Teacher Salary Increase on Student Performance in Indonesia”, Working paper

For the Indonesian National Team for the Acceleration of Poverty Reduction (TN2PK), supported through a grant from the Australian Government, we analyzed the relative efficiency of district public health and education service delivery in Indonesia over the period 2003 to 2008. We apply production frontier models to assess the efficiency of districts in achieving education and health outputs, and costs functions to assess the efficiency of public spending. The analysis combines data from the Ministry of Finance on district spending, Susenas household surveys, and health and education infrastructure indicators from the PODES village census.

Outcomes:

The data show a strong increase in district health and education public spending, as well as service availability. Yet, we also see a large disparity in spending between districts in terms of per capita public spending, both within and between regions. To a large extent this is driven by relatively static characteristics of districts. However, there is some evidence of convergence in spending levels as well as scope for local policy changes to overcome initial public spending differences. This suggests that the central government transfers remain an important policy tool for equalizing investment in health and education in districts.

The analysis reveals substantial variation in efficiency across regions in Indonesia. Given the level of service delivery, district public spending per capita is on average relatively low in Java and Bali. In contrast, Sulawesi and Kalimantan are relatively less efficient in terms of spending, while in Sumatra spending efficiency by district governments has declined strongly since 2006. Districts in Java and Bali also perform well in terms of technical efficiency, as service delivery in these districts is relatively high, given the level of spending and available infrastructure.

The project was completed in 2014.

Research team:

AIID researcher: Menno Pradhan
Collaborator: Robert Sparrow, Australian National University
Publication:

Report:

Sparrow, R., and M. Pradhan (2014). “Productivity Measures for Health and Education Outcomes in Indonesia”, TNP2K Working Paper 15-2014. Jakarta, Indonesia: Tim Nasional Percepatan Penanggulangan Kemiskinan (TNP2K).

Supported by the ADB, we documented the likely importance of district governance and teacher management policies in relation to student learning in Indonesian primary schools. As the responsibility to deliver primary education has been decentralized to district governments, we expect district-specific variations in teacher management policies. Consequently, we also expect variations in learning trajectories across districts.

Outcomes:

We document substantial heterogeneity in learning gains across districts. Furthermore, we show that schools with more active teacher working groups and higher-qualified teachers achieve better learning gains. However, teacher management policy variables, including school budgets, participation rates in teacher working groups, or student–teacher ratios, can explain only a fraction of the differences in learning across districts. It is likely that the “quality” of operation matters. More detailed measurement is needed to further understanding of the heterogeneity in performance.”

The project was completed in 2014.

Research team:

AIID researcher: Menno Pradhan
Collaborator: Joppe de Ree, World Bank, Jakarta, Indonesia.
Publication:

Report:

Pradhan, M. and De Ree, J. (2014). “District Governance and Student Learning in Indonesia“, Economics Working Paper No. 397, Asian Development Bank.