To raise school participation, many programs in developing countries eliminate or reduce private contributions to education. Using data from a randomized experiment in Ecuador, we ironically find that announcing a free school uniform program had a negative impact on attendance. The school uniforms were distributed in only 63% of the schools that were told that they would get them, thus this negative impact could have been generated by creating false expectations of free distribution, or also by a sunk cost effect on those who did actually receive the uniforms.Source: Hidalgo et al (Journal of Development Economics, 2013).
The authors conclude:
We consider several explanations for the unexpected negative effect. A part of it is likely to be due to some students who were promised a uniform but didn't receive it (on time) not having a uniform when the school starts or being disappointed with school. The results from the two provinces in which the implementation of the program failed and where no uniforms were delivered, point to that. This, however, cannot explain the entire negative effect in the three provinces where the pro- gram was properly implemented. A possible explanation for the finding in these provinces is that parents who pay for their children's school uniforms (those in the control group) feel more committed to the school than parents whose children get the uniforms for free (the treated) and therefore do not allow their children to miss classes too easily. We acknowledge, however, that the sunk cost explanation is speculative and that more research is needed to understand when and why it manifests itself and when and why it does not.