Dr. Farrukh Iqbal - Dean & Director IBA

Some observations on the role of the private sector in education in Pakistan

Remarks made at a seminar on Putting the Private Sector at the Core of Sustainable Development Goals in Pakistan, organized by the FPCCI Standing Committee on Research and Development, December 20, 2017

During the last quarter century or so, the private sector became a substantial provider of education services in Pakistan. Data from various sources show the total number of private schools (at all levels, pre-primary, primary, higher secondary, technical and vocational and deeni madaris) began rising sharply in the early 1990s, reached around 36000 in 1999-2000, and around 80000 by 2010 and are currently at around 112000. By contrast, the total number of public schools reached 153000 in 1999-2000 and currently stand at 190000. Roughly speaking, since 2000, the number of private schools has been growing at the rate of more than 10% per annum while the number of public schools has been growing at only about 1.5 % per annum.

Similar trends apply with respect to the number of students enrolled. Private schools increased enrolment from around 6 million students in 1999-2000 to about 20 million currently while public school enrolment rose from around 17 million in 1999-2000 to about 28 million currently.

Moreover, these changes have happened at a faster rate in the rural areas and in small towns than in the urban areas and big cities.

Clearly, the private sector has been expanding access to schooling at a much faster rate than the public sector in recent years. The available evidence suggests the private sector will continue to provide the bulk of incremental enrolment and access to basic education in Pakistan in the coming years.

How has this come about? And are there any downsides to this phenomenon of private-sector led educational development in the country?

The main reason why private education supply has mushroomed in Pakistan in the last quarter century is the growth in availability of cheap female labor for teaching and administrative jobs, especially in small towns and rural areas. This labor force is available at such low wages that it makes economic sense for private schools to supply education at a cost low enough to attract low-income students. Where previously it was not possible for the private sector to provide education services profitably, the availability of pools of female labor in geographically segmented markets has made it possible to do so. Female labor remains cheap because females are, by local custom, confined to look for jobs within the villages and small towns where they live. They cannot and do not migrate freely to where the jobs pay better wages.

There is a downside to this market made possible by minimally-trained and low wage female labor and that shows up in the quality of their output. The quality provided by low-fee private schools is poor. However, these schools can survive in a low-quality competitive equilibrium because government schools, while free to attend, are no better and possibly worse in quality. Public schools are plagued by teacher absenteeism and a lack of equipment and facilities to support decent education. So low-income parents do not mind switching their kids to a low quality private school because the alternative is worse.

Regarding education quality among public and private schools, earlier studies for Pakistan had shown unclear results with some showing private schools to have superior quality results but others showing only marginal differences. More recent data, especially that produced by the ASER organization, show a distinctive quality advantage among private schools. Private schools show better results than public counterparts for English, Mathematics and local language comprehension among Grade 5 students. Where private schools have been growing, quality outcomes are also improving.

The promising potential seen for the private sector in basic education in Pakistan cannot, however, be extended to the segment of higher education. Very briefly, while private universities have been growing in number, the vast majority of them are associated with low quality output. The Pakistan Education Statistics issue for 2015-16 show 163 universities in total, broadly balanced among 91 public and 72 private units. However, enrolment is heavily skewed in favor of public universities with 1.14 million students in the public sector and only 214000 in the private sector. And teaching resources are similarly skewed with 67000 teachers in the public sector and only 17000 in private universities.

All this is consistent with a model of higher education where the private sector only goes into selected disciplines, such as business and IT education, and avoids spending the large outlays required for the establishment of science and engineering universities or general-purpose universities with multiple departments and degree programs. Higher education is not yet privately profitable in those types of higher education institutions.

Andrabi, T. et. Al., 2008, A Dime a Day: The Possibilities and Limits of Private Education in Pakistan, in Comparative Education Review, 52:3, 329-55.
Institute of Social and Policy Sciences, 2010, Private Sector Education in Pakistan: Mapping and Musing
Zubeida Mustafa, "What Aser Says", in Dawn, August 4, 2017