116 APPENDIX
educators is the same in this framework, the two budget constraints can be added together. Assume that the government decides the per-learner amount
of subsidy, gi, so Gi = giLi and gi ≥ 0 for all i (the government does not impose a tax).
The school fee is bounded by some limit, qi —— (f), determined by the socio-
economic circumstances, f, of the school. In particular, the fee is determined by income level and distribution.3 In fact, school fees are determined by SGBs consisting of educators and community leaders, such that most parents can
dition f affects — H
constraint:
max Etei(Li, Hi) = 1 – (yit – ——)2 Hi
x,q
s.t. Gi ≥ wHi
[ s qiLi ≥ wHi u.
Rearranging the budget constraint, we define φ(qi(f); w, gi): w
φ(qi; w, gi) ≡ ——————— ≤ ——. qi(f) + gi
Li Hi Li ]
afford to pay them. Unless the government subsidy gi offsets qi(f), local con- L
—. School maximizes the per-learner education output subject to the budget
(A.1)
The LER is constrained below by the ratio of educator wage (per-educator cost) to the sum of the school fee and the per-learner subsidy (per-learner revenue). When the school decides on the school fee and employs educators,
the determination of the school fee is simple: qi*(f) = qi(f), that is, collect the highest school fees.4 In this model I assume that, at least in the short
3 For example, if community members vote for a school fee, we predict that the fee will be
determined by the median community income. 4 Since 1996 school fees for public schools have been determined by the SGB, which consists of the principal, educators, parents (including community leaders), and sometimes learners at the secondary level. Therefore, the level of the school fee reflects opinions within the community. In community-school governance, the school fee increases as the median of monthly household income increases and as the standard deviation of monthly household income decreases. The former result is consistent with the voting implication, while the latter implies that school fee determination is anti-inequality. In this sense, school governance is altruistic to poor families who have difficulty in paying school fees, but it potentially sacrifices school quality (Yamauchi and Nishiyama 2005).
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