6533b7d8fe1ef96bd126b430

RESEARCH PRODUCT

User charges for education : the ability ans willingness to pay in Malawi

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Investment in education is generally recognized to be essential for a country's long-term economic and social development. However, presentmacroeconomic conditions in many developing countries have obliged their governments to slow down increases in the allocation of public resources for education. As a result, the education sector is likely to develop only slowly, if at all; enrollment, already low in the poorer of the developing countries, would remain low, while the social demand for education would continue to be substantially unmet. In this setting, policy makers have recently focussed their attention on finding alternative sources of finance for education, one of which is the tapping of private household resources via user charges.To mobilize resources by this method, we need first to address two main issues: firstly, are families able and willing to pay; and secondly,what can user charges accomplish in terms of expanding the size of realized enrollment, given the public budget constraint? Country-specificconditions are likely to influence the outcome of these questions, and obviously, they would determine the importance of user charges as a means of mobilizing private household resources.In this paper, we attempt to answer these questions in the case of Malawi. The data used concern mainly primary and secondary schooling. Theempirical evidence suggests that (i) a moderate fee increase is unlikely to precipitate a large drop-out rate among students (primary and secondary) currently enrolled. For example, a 10 percent increase in the average fees to enroll eligible children reduces the proportion enrolled per household merely from 0.58 to 0.55; (ii) even if some currently enrolled students do drop-out excess demand, particularly for secondary schooling, is large enough so that if the fee increease is associated with an increase in the supply of places, the overall number effectively enrolled would be larger than in the situation without the fee increase; and (iii) increases in fees are likely to have a stronger impact on lower income families, so that they should be linked with equity measures, such as a limited number of scholarships awarded on the basis of income and academic performance.