Does Abolishing Fees Reduce School Quality?  Evidence from Kenya

In 2003 Kenya abolished user fees in all government primary schools. We find that this Free Primary Education (FPE) policy resulted in a decline in public school quality and increased demand for private schooling.  However, the former did not reflect a decline in value added by public schools - as anticipated if fees contribute to local accountability - but rather the selection of weaker pupils into free education.  In contrast, affluent children who exited to the private sector in response to FPE benefited from a strong, causal effect on their exam performance which is robust to selection on unobserved ability.