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  1. (12 points) Is teacher absenteeism an area in which intervention by policymakers in developing countries might yield significant benefits? What form might the intervention take? Will higher salaries help?

(1)        Teacher absenteeism can be an area in which intervention by policymakers in developing countries might yield significant benefits. For example, Muralidharan et al. provides the evidence from teacher absenteeism in India. It shows two robust correlations in nationally-representative panel dataset of schools across 1297 villages in India- reductions in student-teacher ratios are correlated with increased teacher absence, and increases in the frequency of school monitoring are strongly correlated with lower teacher absence. Therefore, policies that decrease the inefficiency of public education spending are likely to yield substantially higher marginal returns in teacher absenteeism.

(2)        Increasing the frequency of monitoring and improving the effective student-teacher ratio can be effective intervention, such as hiring more monitoring stuffs. The intervention on educational system can have two components-‘inputs’ into the production of education that expand with income growth (such as improving the teacher salaries), and the efficiency of the use of these inputs.

(3)        Higher salaries can help but only has a modest reduction in inefficiency as measured by teacher absence, according to the evidence in India. It may be because the efficiency of the use of these inputs is not enough.


  1. (12 points) What are the main differences between demand wallahs and supply wallahs as described by Banerjee and Duflo (“Poor Economics,” Chapter 4)? Recall the chapter by Easterly (“Educated for What?”) – do you think Easterly is a supply wallah?

Supply wallahs are people who emphasize that the main impediment to schooling in developing countries is the “supply” of schooling – “find a way to get the children into a classroom, ideally taught by a well-trained teacher and the rest will take care of itself.” Among other places, this position is reflected in UN’s Millennium Development Goals and implicitly holds that learning will follow from enrollment. In contrast to the supply wallahs, the demand wallahs emphasize the demand for schooling. They believe that “there is no point in supplying education unless there is a clear demand for it”, and that the demand for schooling is low because “parents do not care enough about it, and they don’t because they know that the actual benefits (what economists call the “returns” to education) are low.”

I think Easterly is not a supply wallah but demand wallah because Easterly attaches great importance to incentives of education. As Easterly puts it, “The failure of government sponsored educational growth is once again due to our motto: people respond to incentives. If the incentives to invest in the future are not there, expanding education is worth little. Having the government force you to go to school does not change your incentives to invest in the future.” Form which, it can be seen that Easterly holds that only when the incentives to invest in the future are enough, in other words, there is a clear demand there, will the education truly expand. The supply of schooling is meaningless if the demand is not strong enough.




(2 points) What is adverse selection, as related to the teaching profession in developing countries?

Adverse selection is the situation where buyers have information that sellers do not, or sellers have information that buyers do not. Its general rule is that in a situation where true ability is unobserved, and adequate monitoring is infeasible or likely to be erroneous, high salaries may attract the wrong kind of people.

In the case related to the teaching profession in developing countries, sellers of labor (teachers) have information on their own intrinsic motivation; buyers (the government) cannot observe this.

(2 points) What is moral hazard, again as related to the teaching profession in developing countries?

Moral hazard is a situation where one party in the contract may act in a way that hurts the other party after the contract has been agreed upon. In the setting related to the teaching profession in developing countries, teacher attendance and efforts are moral hazard, because of little monitoring. Teachers are supposed to show up and teach, but they may not do so, because they know there is little risk of being punished. Even if the best people are hired (e.g., the smartest college graduates), they may not exert enough effort if incentives are lacking.

(4 points) Briefly summarize Muralidharan et al. (Fiscal Cost of Teacher Absenteeism in India) arguments with respect to improving schooling outcomes in developing countries? Do you think this will address adverse selection, or moral hazard, or both?

According to Muralidharan et al., the large inputs on education have not led to many improvements of schooling outcomes in developing countries, measured by reduction of teacher absence. Hiring more supervisors rather than teachers is likely to be a more cost effective way of reducing teacher absence. Therefore, policies that decrease the inefficiency of public education spending are likely to yield substantially higher marginal returns than those that augment inputs.

I think supervision can address moral hazard partially, but it is hard to address adverse selection. Much monitoring can push teachers to show up and make efforts to teach students, otherwise they may get punished. However, even under strong supervision, teachers still can make little efforts to teach well, so it can address moral hazard partially. In adverse selection, true ability may be unobserved, and adequate monitoring may be infeasible or is likely to be erroneous. In this situation, high salaries may attract the wrong kind of people and monitoring may not address adverse selection.

(3 points) What were the main arguments in the Bold et al. paper (Teacher Absenteeism in sub-Saharan Africa)?

The main arguments in the Bold et al. paper are that teachers in sub-Saharan Africa perform poorly in some complementary, dimensions. They are absent from the class sometimes, teach too little, and lack the necessary skills and knowledge to teach effectively. There are few teachers with at least basic pedagogical knowledge and minimum subject knowledge in language and math for the full scheduled teaching day, so essentially few public primary schools in these countries can offer adequate quality education.

(4 points) Do you think that the Muralidharan proposal will address any or all of the problems Bold et al. highlight? How would you address the remaining problems (with respect to teaching) in their (Bold et al.) paper?

I think strong supervision can partially address teacher absence and teaching too little. Strong monitoring can supervise teachers to show up and make efforts to teach, but it cannot ensure the high quality of teaching.

For the remaining problems, I think the government can set up more strict evaluations when hiring teachers, to ensure the necessary skills and knowledge to teach effectively. Schools can start some appropriate incentives and punishments to encourage teachers to teach effectively.




(4 Points) In his book “The Rebirth of Education: Schooling Ain’t Learning”, Pritchett talks about the learning achievement profile. Describe what this measures, and the main concern about its slope across developing countries.

The learning achievement profile measures a learning goal, which indicates the learning trajectory of students’ mastery per year of schooling. The main concern about the slope across developing countries is that the learning profiles are too flat. The author uses date from three different studies from India that use grade learning profile to illustrate troublingly low levels of learning.

(4 points) Pritchett writes, “In some countries, schooling has created cognitive skills and these skills have been in demand, but to do the wrong thing. In other countries, the institutional environment has been sufficiently bad that the bulk of newly acquired skills have been devoted to privately remunerative but socially wasteful or counterproductive measures. In some countries, schooling has been enormously effective in transmitting knowledge and skills, while in others it has been essentially worthless and has created no skills.”

What is the main conclusion of Hanushek and Woessman (“Do better schools lead to more growth”, Journal of Economic Growth, 2012)? What do you think of this conclusion in the light of Pritchett’s above comment?

The main conclusion of Hanushek and Woessman in their article is that cognitive skills are closely related with economic growth, in other words, cognitive skills alters individual earnings, thus affecting overall economic growth. Therefore, school quality and teacher quality are of great importance to increasing long-term economy in developing countries. In the light of Pritchett’s comment, this conclusion is a little lopsided because aside from cognitive skills, the way of using cognitive skills and institutional environment also have great implications on the outcome of transmitting cognitive skills. Once cognitive skills applied wrongly, the economy will not necessarily grow.



(3 points) What are the outcome variables that Duflo investigates in her paper on school construction in Indonesia? If you were a demand wallah, what variable would you like to investigate in addition (assuming data are available)?

Duflo investigates the effect of INPRES programs by the number of schools, years of education and the wages. For a demand wallah, it is meaningless to supply education without a clear demand because the quality of education is low without attention and care from parents, and if the benefits of education is very high, the enrollment will also increase. Therefore, I would like to investigate the students’ willingness to receive education and parents’ support for students to get education.

(5 points) Between 1914 and 1931 in the US South, 5,000 schools were constructed as part of the Rosenwald Rural Schools Initiative. What are the long-run variables that you would like to examine if you were to conduct an evaluation of this program? (Hint: Think of the long time-span since the program, which allows for the examination of additional outcome variables.)

I would also control the birth cohorts and districts to trace the career and marriage of the students in this program, and intergenerational effects, like the schooling years of their children. Because this is a long-run program, we can examine if exposed men have secure jobs and women have better marriage, and calculate the years of education for their children. these variables are all benefits from the higher educational attainment for a long time.




We have discussed two papers related to RCTs providing information to students – one by Jensen, and one by Loyalka et al. Here you compare and contrast the two papers, as follows:

  1. (5 points) Describe briefly the setting of the two studies. That is, discuss the country/state, the time period, and educational background of each at the time the experiments were conducted.

In Jensen’s paper, the study was conducted in the Dominican Republican where although 80%-90% of youths complete (compulsory) primary schooling, only about 25%-30% complete secondary school. The duration was from January, 2001 to 2005.

In Loyalka et al.’s paper, the study was conducted in China from December, 2010 to May, 2011. The educational background is that children in poor, rural areas today grow up, they may not be able to enjoy China’s future economic prosperity because of their low levels of education. Only about two-thirds of the students from poor, rural areas in China enter high school. Instead of continuing their education, most of these children enter the labor market and take unskilled jobs.

  1. (4 points) Briefly describe the randomization strategy in each experiment.


In Jensen’s experiment, The household sample was drawn in two stages. First, from the thirty largest cities and towns, Jensen chose 150 sampling clusters at random. Then, from each school, Jensen interviewed fifteen randomly selected boys enrolled in eighth grade. Third, at the end of the student survey, each respondent at a randomly selected subset of schools was given information on earnings by education from the household survey and the absolute and percent return implied by those values. Last, Randomization was conducted blindly by the author, with each school having an equal likelihood of selection into the treatment and control groups. Compliance with randomization was ensured by providing enumerators with treatment-specific questionnaires (i.e., the questionnaires provided to enumerators visiting treatment schools included the paragraph above, and those provided to enumerators visiting control schools did not) and random auditing through visits during the survey process.


In Loyalka et al’s experiment, at the beginning, the overall sample of 131 schools was randomly divided among three bins – information intervention group, counselling intervention group, and the control group. In a second round, within the information intervention group and within the counselling intervention group (but not within the control group), half of 7th grade teachers (and classes) were randomly chosen to attend the respective training program.


  1. (8 points) Briefly summarize the main findings of each paper. Now compare them. Are they similar, or are there meaningful differences?


Jen’s finding: Despite despite high measured returns to secondary schooling in the Dominican Republic, the returns perceived by students are low; Demand appears to be a limiting factor in schooling attainment in the Dominican Republic; Although there may be some public good or spillover effects of education that make the social returns higher than the private returns, it is unlikely to be desirable public policy to provide information known to be incorrect, even if it leads to outcomes deemed socially desirable.


Loyalka et al.’s finding: Students from poor, rural junior high schools in China lack information about the returns to schooling and career planning skills; Information has negligible impacts on student outcomes and that counseling increases dropout and may lead to lower achievement; Providing information and counseling also seems to be less important than improving education quality; Credit constraints also likely explain why poor, rural students are not affected by the interventions.


Comparison: It is similar that both papers admit the fact that poor students lack information about the returns to schooling and career planning skills. However, the differences are that Jensen thinks that providing correct information and creating the demand contributes to the schooling attainment. By contrast, according to Loyalka et al., providing information and counseling doesn’t have any positive impact on student outcomes because there are various limitations like financial restricts. Improving education quality seems to outweigh information supply.


  1. (4 points) Based on these findings, which is the most promising approach to advice to a policymaker?


Decrease the cost of schooling and provide financial aids to make sure poor students have equal access to schools. Then, improve education quality to convince students of high returns from schooling instead of propaganda and preaching.


  1. (4 points) Would you want to repeat these experiments TODAY? What information would you like to have before you proceed?


Yes, these experiments are still quite meaningful because the situation of high rates of dropout doesn’t improve much. Before the experiment, basic information such as the schooling data of selected areas, educational background, local educational policy, local economic condition, the proportion of students in each stage of schooling, local population proportions are imperative.

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