1.
EminentPanelConference,Accra,August7th -9th,2020
Education
Ebo Turkson*, Priscilla Twumasi Baffour* and Copenhagen Consensus
*Department of Economics, University of Ghana

2.
Senior High School: Subsidies for children to
attend private schools
Ebo Turkson, Priscilla Twumasi Baffour and Copenhagen
Consensus

3.
Why Subsidies to attend Private SHS in Ghana?
Context
• Free SHS Policy:
- increased enrolment mismatch with
Infrastructure in public schools
• Immediate solution: double track
system (DT)
• More sustainable solution is needed
- DT could worsen academic performance
- DT can deplete educational infrastructure
if run down (Takyi et al., 2019; Graves et
al., 2018)
Government Commitment
• to end DT system
• raised billions of cedis to build new
schools and expand existing
Questions
• Is infrastructural expansion the cost-
effective solution to end DT?
• Is there another alternative solution
to infrastructural expansion
• What about provision of subsidy to
attend existing private SHS

4.
Intervention: subsidy to private SHS
• Government offers a spot to children who are unable to gain entry into public
schools via the public placement process by rather placing them in private
schools and giving them per-student subsidy (tuition/day student fees)
• Caveats:
- Private school of comparable quality with public schools;
- No financial commitment from the pupils;
- Adequate supervision to ensure efficiency in teaching activities and to prevent
compromise in efficiency due to profit motive in running the private schools
• The private schools will admit students to their capacity in order to ensure
effective teaching and learning; applying a cap on pupil-teacher ratio.

5.
Evidence on the effects of subsidy to private SHS
• Widely applied in many LMICs and advanced countries
• Pro-poor public subsidy to private schools in Punjab, Pakistan (over 17 months)
yielded increase in pass rate (59% ), teachers (46%) and classrooms (47%) and
14% reduction in student-classroom ratios (Punjab et al.,2015).
• Promoting Private Schooling in Rural Sindh (PPRS) program in Pakistan yielded
30 percentage points increase in enrolment and 0.63 sd. (0.16 sd.) increase in
total test scores relative to non-treated villages (students in public schools)
• In Uganda, private non-boarding school subsidy of 47,000 UGX per student and
teaching materials led to 35% improvement in enrolment and 0.16 sd.
improvement in mathematics relative non-participant private schools (Barrera-
Osorio et al., 2016).

6.
Costs- Subsidy to Attend Private SHS-30,000 students
• Prospective CBA for the provision of public subsidies to 30,000 children per
year (a more realistic assumption instead of MOE’s estimate of 140,000 to
180,000) in private schools over fifteen years.
• Costs:
- Assume fees for a day SHS pupil for the year of entry is GHS650 (MOE, 2018).
- Considering 3-year SHS cycle, providing for the doubling and tripling of enrolment in
the second and third years respectively and then onwards (years 4 to 15).
- The total annual cost of the subsidy for 15 years =GHS19.5m+GHS39m+13*(GHS58.5m)
- Negotiation Costs to engage private schools = GHS3m (upfront)
- Cost of administering the program = GHS0.5m annually
• Over 15 years, the overall cost of this intervention
- Overall Cost=[GHS19.5m+GHS39m+13*(GHS58.5m)] + GHS3m + (GHS0.5m*15 years)
= GHS58.5 + GHS761m + GHS3m + GHS6m= GHS829m

7.
Benefits- Subsidy to Attend Private SHS-30,000 students
• Benefits:
- We assume that a typical government school can hold 600 students per class year, or
1800 students in total.
- Based on 90,000 students absorbed by the private sector in steady state, implying an
avoided cost of building 50 schools
- The cost of building a new school at this capacity is estimated at around GHS5m
(see World Bank (2020) and the Deputy Minister of Education’s school building
cost estimate of GHS5m-GHS6.5m).
- The upfront savings of not building 50 schools = GHS250m.
- Assuming operation cost of GHS650 per student (equivalent to school fees in public
schools before the free-SHS policy).
- Transfer from public sector to private sector= [(GHS650*30,000) + (GHS650*60,000) +
(GHS650*90,000* 13 years)] = GHS19.5m + GHS38m + GHS760.5m= GHS819m for 15
years.

8.
Benefit-Cost ratio- Subsidy to attend Private SHS
• Table 1: Summary of costs and benefits for 15
years of subsidy to 30,000 students • For 15 years of subsidies to
pupils in private SHS, the total
benefits equal GH¢ 734m with
34% of the benefits from savings
on the cost of building new
schools.
• The total costs would be GH¢
491m, mostly representing the
direct costs of subsidies.
• At an 8% discount rate the BCR is
1.5

9.
BCR Sensitivity Analysis- Subsidy to attend Private SHS
• Table 2: Summary of costs and benefits -Sensitivity
Analysis (Learning Benefits)
• Parallels between Ghana and Uganda.
• Ugandan study reports 0.07-0.16 s.d.
improvement in test scores due to
subsidy.
• Midpoint value used =0.12
• Assume that a 1 s.d. in test scores
leads to an 18% boost to future wages
(see Turkson et al, 2020).
- Boost in wages equals 2%
• lifetime benefit =GHS3,100 (8% d.r.)
• Total Learning Benefits (15 cohorts of
30,000 SHS graduates)= GHS861m
• The BCRs more than doubles

10.
Conclusion & Policy Implication
• Complement the building of some schools with providing subsidies to pupils
to attend private SHS
- better investment than the alternative of building new schools alone
• The intervention allows the government to avoid paying the upfront costs
of building schools by utilizing existing (private sector) infrastructure.
- This is a significant one-off cost saving of GHS250m
• It may allow the government to exit the double track system sooner
- this potential benefit is not quantified
• Will forestall future excess capacity in schools- backlog is totally sorted

11.
References
• Barrera-Osorio, F., de Galbert, P., Habyarimana, J., & Sabarwal, S. (2016).
Impact of Public Private Partnerships on Private School Performance (Policy
Research Working Paper 7905 Abstract).
• Graves, J., McMullen, S., & Rouse, K. (2018). Teacher Turnover, Composition
and Qualifications in the Year-Round School Setting. The B.E. Journal of
Economic Analysis & Policy.
• Turkson E, Twumasi Baffour, P and Wong, B. (2020). Cost-benefit analysis of an
intervention to accelerate the end of the Double Track system at the SHS
Level: Provision of Government Subsidies to Children to attend private SHS,
Ghana Priorities, Copenhagen Consensus Center, 2020. License: Creative
Commons Attribution CC BY 4.0.

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Questions & Answers