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The study aims to provide insight on the potential effectiveness of demand-side financing for catalyzing improved educational outcomes in Malawi; and, given the extent of cost-related constraints to school contexts in other low-income countries, the results have relevance for education policy decisions more broadly.

This study utilizes a non-equivalent groups research design to compare the educational experiences and outcomes of two student groups – those who did and those who did not receive a needs-based scholarship to attend secondary school and college in the Dowa, Kasungu, and Lilongwe Districts of Malawi. The authors assess impacts across a range of short and medium-term outcomes, including: school attendance, withdrawal, attainment, graduation, employment status, employment quality, and post-schooling income.

The scholarship substantially reduces the household cost of participation in school, and reduces the distance travelled to school. As a result, scholarship recipients attain between 1 and 1.5 years of additional schooling and graduate at higher rates. In terms of post-schooling outcomes, recipients are in higher wage-earning occupations after leaving school. Overall, results suggest that scholarships are an effective demand-side strategy for improving educational attainment, progression, and potentially longer-term labor market outcomes.

The study adds new evidence on policy approaches for expanding access to educational opportunities and increasing labor market outcomes in a context (Malawi specifically and sub-Saharan Africa more broadly) where evidence on such demand-side interventions is still growing.