A Benefit Incidence Analysis of Public Spending on Education in Pakistan Using PSLM Data

Abstract

Education is one of the most important means of economic development, and there is consensus among policymakers that it is better to be educated than not. The debate on education is not, therefore, whether it is good or bad, rather it centers on whether the state should intervene in its provision. Public provision of education at the school level is generally considered one of the most important investments for creating social opportunities to help the wider population actively participate in various economic activities. This study investigates whether public spending on education in Pakistan is pro-poor at various levels of schooling. We find that public spending at the primary and secondary level is progressive, while higher education spending is regressive. These results hold at the national and provincial level. Based on these findings, we recommend that the government increase its spending on primary, secondary, and technical education. Higher education, however, should be provided on merit, and the private sector should be encouraged to provide high-quality education.