Decomposing Learning Inequalities in East Africa : How Much Does Sorting Matter?

Economic inequalities reflect inequalities in educational opportunities which in turnare due to both household and school-related factors. Although these factors plausiblyco-vary, few studies have considered the extent to which sorting between schools andhouseholds might aggravate educational inequalities. To fill this gap we develop a novelvariance decomposition and apply it to data on educational outcomes for over 1 millionchildren from East Africa. Our results indicate that sorting accounts for as much as 8percent of the test-score variance, a figure similar in magnitude to the contribution ofdifferences in school quality alone. Empirical simulations of steady-state educationalinequalities show that policies to mitigate sorting between households and schoolscould further reduce educational inequalities over the long-run substantially, equal tocutting the inter-generational persistence of educational attainment by more than half