Quality or Quantity?: The supply-side determinants of primary schooling in a poor rural Economy by Sudhanshu Handa and Kenneth R. Smiler

The role of school quality in determining educational outcomes has received much research attention in the United States. However, in developing countries, where a significant part of the school age population never attends school, policymakers must consider both quality and quantity when deciding how to maximise the impact of scarce investments. Acknowledging this difference in the policy environment in developing countries, this paper provides comparative estimates of the impact of quality versus quantity investments in school supply in rural Mozambique, one of the world's poorest countries. Policy simulations show that improving school quality increases mean grade attainment and efficiency by approximately 4% and overall enrolment rates by a similar amount. However, much greater improvements can be generated by increasing starting enrolment probabilities through the establishment of new schools in all rural villages that currently do not have schools. Furthermore, significant rates of increase in school achievement indicators can be achieved by building schools in only 56% of all villages currently without schools, provided these schools are placed in those villages that also do not have a school nearby. When cost information is considered, the main policy implication is that the expansion of school quantity through well-targeted placement of new schools will provide the most cost-effective increase in educational outcomes for Mozambique at this time.