Abstract:
To raise school attendance, many programs in developing countries eliminate orreduce private contributions to education. This paper documents an unintendednegative effect of such programs. Using data from a randomized experiment thatprovides free uniforms to primary school children in Ecuador, we find that the interventionhas a significantly negative impact on attendance. An explanation is thatparents who pay for their children’s uniforms (the control group) feel more committedto the school than parents who got the uniforms for free (the treated) andtherefore encourage their children to attend school. Consistent with this sunk costeffect, we find that the impact is largest shortly after the purchase of the uniform,and during the end-of-year exam period when more is at stake.
