How price sensitive is secondary school enrollment? Evidence from nationwide tuition fee reforms in South Africa∗

This paper advances the literature on education demand in developing countries by studying a policy of nationwide school fee eliminations in South Africa. I use a regression discontinuity design that compares schools just above a threshold poverty level, most of which eliminate fees, to schools just below the threshold, most of which continue to charge fees. I show that fee elimination has a relatively small effect, increasing enrollment by approximately 10 students, or 3% of baseline enrollment. These results are considerably smaller than those reported elsewhere in the literature and imply a relatively inelastic demand for enrollment in this setting. The effects are substantially larger in urban than rural areas and larger in secondary schools than in primary schools. I argue that this at least partially reflects more elastic demand for enrollment at the secondary level.