Working paper 689
This papers examines the effect of private schools on literacy and numeracy skill acquisition among children mainly drawn from lower primary grades in Kenya. We apply a number of estimation approaches that accounts for endogeneity of school choice. We begin with the OLS, as a baseline model. We then estimate the household fxed effects (FE) model to control for unobservables at the household level. We supplement the OLS and FE models with the propensity score matching (PSM) technique. We find a significant private school advantage throughout these methodologies. However, assessing the impact of omitted variable bias (OVB) on the estimated coefficient of private school effect, we find that the bias in the household FE is quite small in magnitude relative to other estimation techniques. Sinc private schooling decision is made at the household level, it is likely that a substantial part of the unobservable component is pertaining to the household.
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