Why equal pay provision for community and private school teachers in Kathmandu is flawed

This article was originally published in Nepallivetoday on July 14, 2023 by Prakash Maharjan. Mr. Maharjan ​​is a researcher at Samriddhi Foundation, an economic policy think tank based in Kathmandu. The views expressed in this article are the author’s own and do not represent the views of the organization. Author can be reached at [email protected]

The pursuit of equal pay for community and private school teachers in Kathmandu Metropolitan City raises several concerns, many of which suggest the decision to be preposterous.

The Mayor of Kathmandu Metropolitan City urged underpaid teachers from private schools to come forward and lodge their concerns at the education department. The Mayor emphasized that private schools are legally obligated to pay teachers the same salary as their counterparts in community schools. If private schools in Kathmandu resist the decision, the metropolitan authorities may employ force to shut down the schools.

Unintended consequences

Implementing such a policy may have significant unintended consequences.

Firstly, private schools, especially low-cost private schools, may face closure. It is important to comprehend that private schools do not receive any form of financial support from the government. In addition, the fee structure of the schools are regulated by the government, and in the context of Kathmandu Metropolitan City, its Education Act mandates private schools to provide scholarships to 10 percent of the total enrolled students. Thus, an additional regulation on increasing teachers’ salaries might impose additional financial burdens on these schools.

According to a 2015 study commissioned by the Ministry of Education, private schools have demonstrated adherence to government policies by allocating 60 percent of their expenditures towards teachers’ salaries, as per the individual capacity of each school. Furthermore, these schools provided a wide range of extracurricular activities to students, despite their income remaining below the government’s prescribed threshold of allowing schools to generate up to 10 percent profit. A further burden on the treasury might impact the viability and competitiveness of private schools, eventually resulting in their closure. This can have adverse effects on access and quality of education. Moreover, the teachers will likely either lose their jobs altogether or experience reduction in other benefits provided by the schools.

The proposed policy may lead private schools to increase fees or find loopholes to charge higher fees, negatively impacting the students from low income families.

Secondly, the policy may lead private schools to increase fees for extracurricular activities or find loopholes to charge higher fees, negatively impacting the students from low income families. The cost of studying in private schools could rise, reducing accessibility for those who rely on affordable quality education. The schools might also resort to reducing existing facilities for students, which might lead to a reduction in overall quality of education.

Lastly, the regulation may have adverse implications for teachers. There are schools in Nepal that pay exorbitant amounts of salary to the teachers. It is important to acknowledge that certain schools in Nepal offer significantly higher salaries to teachers compared to others.

Implementing mandatory provisions to standardize salaries may incentivize these schools to reduce or fail to increase teachers’ remuneration, which would benefit the schools financially. Currently, teachers have the option to gain experience and pursue employment at higher-paying institutions. However, such mandatory provisions could disincentivize teachers from honing up their teaching skills and accumulating valuable experience in order to secure higher-paying positions. Moreover, private schools might respond to such initiatives by reducing the number of teachers and increasing the workload for the remaining instructors, ultimately impacting the overall quality of education.

As of 2018, there were 608 private schools in Kathmandu providing education services, with several low-cost schools effectively catering to low-income parents and delivering quality education. However, with the Mayor’s recent initiative, these affordable schools may face closure, leaving low-income parents with limited options: enrolling their children in high-fee schools or settling for public schools with comparatively lower educational standards. The potential consequences of implementing the equal pay policy for teachers in Kathmandu Metropolitan City extend beyond the schools themselves.

“Price fixing represents a net loss to the economy as a whole to the extent that many transactions do not take place at all, because the mutually acceptable possibilities have been reduced,” says American economist Thomas Sowell.

It’s a private affair

It is essential to acknowledge that the interaction between teachers and schools is inherently a private matter. In the realm of private exchanges, a mutually beneficial outcome is achieved when both parties are equally advantaged. The government lacks the authority to intervene in these voluntary transactions.

The regulation of the education sector has been a topic of widespread discussion, with many arguing that schools should prioritize their role as service providers rather than profit-oriented businesses. Over time, the government has implemented various regulations to establish regulatory frameworks for private/institutional schools. For instance, in 2002, a mandate was introduced that required private schools to register as private companies or trusts. Subsequently, the government introduced the “Private and Boarding Schools Guidelines, 2012,” which fixed permissible fee charges, followed by the “Institutional School Criteria and Operation Directive, 2013,” which established specific infrastructure requirements for private schools.

The government has often overlooked the significant contributions of private schools in enhancing the overall education sector of the country. Previous attempts to regulate schools have primarily viewed private schools as profit-oriented entities, aiming to subject all types of schools to uniform regulatory frameworks. In contrast to the perception that private schools are solely driven by profit and charge exorbitant fees, enrollment in private schools has been steadily increasing compared to public schools, as reported by the Office of the Auditor General. Over the past five years, enrollment in private schools has risen by 47.55 percent, while public school enrollment has declined by 20.14 percent. One crucial factor contributing to this trend is the perceived quality of education offered by private schools, which often surpasses that of public schools.

Rather than focusing solely on regulating fee structures or teachers’ remuneration, it is essential for the government to prioritize the regulation of educational quality. The central discussion should revolve around enhancing the quality of education and ensuring that students’ interests are at the forefront. Key considerations should include evaluating the actual benefits students derive from the curriculum, the effectiveness of educational programs in equipping them to address real-world challenges, and the availability of diverse curriculum choices for students. The government must adopt evidence-based decision-making processes and engage in comprehensive discussions to drive significant improvements in the education system. Taking inspiration from countries like India and Kenya, where low-cost private schools provide exceptional quality education, the government should actively support and promote such institutions to further enhance educational outcomes.