Determinants of Household Expenditure on School Education in Rural India
A Literature Review on Service Delivery in India provides a summary of a paper by Jandhyala B.G. Tilak titled Determinants of Household Expenditure on Education in Rural India, originally published as NCAER Working Paper No.88. (2002).
Tilaks study, also based on the results of NCAERs 1994 Human Development in India (HDI) survey, begins by noting that the existing literature on household expenditures on education in India is very limited, and that research on the determinants of household expenditure is virtually non-existent.
Attempting to partially fill this research gap, Tilak looks at three broad areas:
- The extent of household expenditure on education by different groups;
- The elasticity of household expenditure on education to changes in both household income and government expenditure on education;
- The determinants of household expenditure on education.
Several important results emerge.
- First, it is found, there is a complete absence of free education in India: regardless of a households socio-economic background, spending on education is very substantial even at the primary school level.
- Second, indirect costs, such as books, uniforms and examination fees, are very high, even in government-run schools, including at the primary level.
· Third, given the absence of a well-developed credit market for education, expenditure on education is highly (and positively) correlated with income.
· Fourth, willingness to pay and compulsion to pay (i.e., the need to compensate for a shortage of government spending on education) are both important factors.
· Fifth, government spending and household spending on education are not substitutes, but complements: an increase in government spending is associated with an increase in household spending (due to an enthusiasm effect resulting from improvements in school facilities, number of teachers, etc.); conversely, a reduction in government expenditure leads to a decline in household spending on education. (Equivalently, the elasticity of household expenditure to government expenditure is found to be almost unitary, and positive.)
· Finally, it is found that the provisions of schooling in rural habitations, or the provision of such school incentives as mid-day meals, uniforms, textbooks, etc., are both associated with increased household demand for education.
Looking at the determinants of household expenditure, Tilak finds, as might be expected, that income levels, demographic factors, occupation types, school type, and the level of village development, are all important factors.