Essays on spatial effects of public schools infrastructure on growth and inequality

Abstract

This thesis analyses the impact of public investment on growth and spatial inequality in post apartheid South Africa, focusing on a large public school construction program implemented from 1994 to 2013. Using a unique dataset on school construction, the study assesses the spatial distribution and economic effect of educational investment across local municipalities in KwaZulu-Natal and South Africa more broadly. This thesis is divided into three main chapters. Chapter 2 explores the placement, design, and distribution of public schools and economic activities across 44 local municipalities in KwaZulu-Natal, using Geographic Information System (GIS) techniques to map school locations and night lights as proxies for economic activity from 1992 to 2013. Public schools are classified into fee-paying and non-fee schools, corresponding to different financing models, The analysis shows substantial spatial variations in economic activity and school growth. Ethekwini municipality, for instance, demonstrates higher growth in economic activity and greater school placement variation, especially among fee-paying schools, compared to eDumbe, which shows minimal economic growth and is the least-performing municipality. Chapter 3 investigates the effects of public-school placements on growth and spatial inequality across 120 local municipalities from 1992 to 2013, controlling for a large set of initial conditions and local factors. The results show that investment in fee-paying schools, where schools' running costs are partially covered by parents, is associated with positive income growth, while investment in non-fee schools appears to have no significant effect on local income and may contribute negatively. Using quantile regression, the analysis reveals that public investment has primarily benefited higher-income municipalities, exacerbating inequality. Finally, chapter 4 applies hierarchical linear modelling to decompose spatial heterogeneity in educational investment across municipalities over the same period. This chapter finds significant variability in both income and economic growth across municipalities, with metropolitan municipalities receiving a larger share of school construction investment compared to non-metropolitan areas. The findings indicate the presence of random variations or unconditional means in both intercepts and slopes for local municipalities where the public schools (fee and non-fee schools) are nested. The analysis suggests that public school investments are spatially uneven, with metropolitan and more affluent areas gaining more resources, which likely contributes to the persistence of inequality in South Africa.