Principal Investigators
Tahir Andrabi
Jishnu Das
Asim Khwaja
Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets
Abstract: 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.
Citation: Andrabi, Tahir, Jishnu Das, and Asim Ijaz Khwaja. 2017. "Report Cards: The Impact of Providing School and Child Test Scores on Educational Markets." American Economic Review, 107 (6): 1535-63.
Policy Problem
In many low-income countries, education systems feature a mix of public and private schools operating in weak regulatory environments with little oversight or accountability. Parents often have incomplete or inaccurate information about school quality and their children’s learning levels. This creates asymmetric information in education markets, where high- and low-performing schools are not easily distinguishable by consumers (parents).
Due to this, parents may end up paying more for underperforming private schools or fail to pressure public schools for better performance. As a result, market inefficiencies persist—good schools are under-rewarded, bad schools continue operating, and parents make suboptimal education decisions. While there is a widespread belief that transparency and parental information can drive improvements, the empirical evidence is mixed; sometimes effects are null or even harmful due to manipulation, selection bias, or cheating in response to "high-stakes" accountability.
This study investigates: Can providing performance information alone, without financial incentives or additional regulation, improve educational outcomes, enhance efficiency, and reshape market dynamics?
Method + Scale
The authors conducted a randomized controlled trial (RCT) in 112 rural villages in Punjab, Pakistan, where both public and private schools compete for students.
Key design features:
Treatment Group (56 villages): Parents and schools received report cards showing:
Each child’s performance in English, Urdu, and Math (graded + ranked)
The average test performance of each school in the village
Control Group (56 villages): No information provided.
Timing: Initial data collection and testing in 2004; report cards distributed before the following school year (2005), results tracked over two years.
Each village was treated as an independent education market ("island economy") because:
Children rarely enroll outside their village
Private school pricing and quality operate autonomously
Average of 7.3 schools per village (public and private)
Data Collection:
Over 12,000 Grade 3 students tested using standardized assessments
Annual surveys of all 823 public and private schools
Household surveys from ~1,800 families
Analysis of test scores, enrollment, school fees, parental perceptions, and provider response (school closures, faculty changes)
Research Question
Can providing transparent report card information on school and child test performance improve:
Student learning outcomes (test scores)?
Market efficiency (through fee adjustments and school closures)?
Equity and access (via higher enrollment rates)?
Key Findings
Test Score Gains: Average scores in treatment villages increased by 0.11 SD — a 42% larger gain than in control villages.
Fees Declined: Private school fees fell by 17% (PKR. 187 on average).
Enrollment Increased: Primary-grade enrollment rose by 3 percentage points (~4.5%).
School Closures: Low-performing private schools 12.5% more likely to shut down in treatment areas.
Private School Responses:
Low-performing private schools improved test scores substantially (by 0.31 SD)
High-performing schools reduced fees but saw no learning gains
Public Schools Improved Too: Despite not charging fees or responding through pricing, public schools increased scores by 0.09 SD — likely due to social pressure and increased parental engagement
Household Inputs: No rise in parental time or financial investment, but increased interaction with schools and teachers
Impact strongest in more competitive education markets (i.e., with more schools and lower market concentration)
Policy Lessons
Information Alone Can Improve Education Outcomes: In low-regulation, competitive education markets, simply providing credible information to households can drive measurable improvements in school performance. This can happen without the need for direct policy mandates, financial incentives, or infrastructure investments.
Parents Use Information for Accountability, Not Spending: While households clearly value quality, most use the new information to hold schools accountable—through complaints, transfers, or advocacy—rather than by increasing their own educational spending.
Market Discipline Increases When Information Is Available: Once parents have access to reliable data on school quality, fee structures begin to reflect actual performance. Low-fee, high-performing schools gain market share, while higher-cost, lower-performing institutions face pressure to improve or lower prices.
Competition Enhances the Impact: The benefits of information disclosure are greatest in areas where there is real choice among multiple schools. Encouraging and preserving competition within the school system can amplify the impact of similar interventions.
Extremely Cost-Effective Policy Tool: The entire intervention costs approximately $1 per student. The resulting gains in test scores and enrollment suggest it delivers very high returns when compared to more expensive interventions like school vouchers, infrastructure upgrades, or conditional cash transfers.
Low-Performing Schools Respond the Most: The greatest learning gains are observed in historically low-performing private schools. Public schools also show modest improvement, even when not in direct competition, suggesting a broader systemic effect.