Estimating Private School Premium for Primary School Children in Ethiopia: Evidence from Individual-level Panel Data

Abstract

This article presents the first value-added model of private school effect in Ethiopia, using the unique Young Lives longitudinal data. I found a substantial and statistically significant private school premium (about 0.5 standard deviation) in Maths, but not in Peabody Picture Vocabulary Test (PPVT). Private school premium works for both low and high ability children. The results are robust to sorting on unobserved ability, grouping on lag structures and transfer between private and public schools. Combined with available contextual data, empirical evidence suggests that the effectiveness of private primary schools may be due to more learning time and teacher’s attention enjoyed by students. I also attempted to contribute methodologically to the literature by directly testing the structural assumption underpinning value-added models.