Abstract: We evaluate the effects of publicly funded private primary schools on child enrollment
in a sample of 199 villages in 10 underserved districts of rural Sindh province, Pakistan. The
program entailed the creation of new schools by private entrepreneurs, with the aim of leveraging
market mechanisms and local knowledge for the improvement of educational outcomes while
keeping costs low. The schools were open to all students of primary school age within the village
at no cost. The evaluation is based on the random allocation of new schools at the village level.
The program increases child enrollment by 30 percentage points in treated villages for both
boys and girls. We find no evidence that providing greater financial incentives to entrepreneurs
for the recruitment of girls leads to a greater increase in female enrollment than does an equal
compensation scheme for boys and girls. Test scores improve dramatically in treatment villages,
rising by 0.67 standard deviations relative to control villages. Test scores suggest the program
schools have higher educational productivity than government schools, with students scoring 0.16
standard deviations higher, despite coming from socio-economically marginalized households. A
structural model of supply and demand suggests that entrepreneurs provide nearly-efficient levels
of school characteristics.